Nigeria and other African oil producing countries need to adopt cost efficient measures to mitigate the effects of the declining prices of crude oil on their economies.

Minister of Finance and Coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala, stresses the need to implement tighter fiscal and monetary policies in Nigeria, Africa’s second biggest producer of oil. This, she believes should cushion the effect of the present oil crisis on the country.

Crude oil export accounts for about 83 percent of Nigeria’s total export, making activities in the international market crucial to Nigeria’s economic growth. With oil crisis seemingly set for an extended period, certain measures have been tabled to remedy the situation. Among the many, Okonjo-Iweala ruled out the option of further borrowing.

“As external pressures mount in the face of falling commodity prices, the pressure to ‘go a-borrowing’ to maintain fiscal expansion will also increase. But we cannot afford to do this,” the minister said at the Institute for International Finance’s 2014 Africa Financial Summit in Lagos.”We need to make necessary adjustments with tighter fiscal and monetary policy, and we need to build up economic buffers beyond the mere 5.4 months of imports the region is estimated to have.”

Other oil producers, expected to face similar threats from the crisis, have been advised to adopt Nigeria’s strategy of placing strong buffers in the form of savings and economic diversity to minimize possible effects. “Nigeria and other countries in the African continent must step back and learn the lessons of the ongoing economic transformation in the country. The Federal Government has put in place strong stabilization policy, but the most important thing is that we must be able to sustain it” Okonjo-Iweala said. “Still on improving macroeconomic performance, countries in the region must aggressively look for alternative sources of revenues and stem leakages. It is now imperative to drive up domestic resource mobilization especially taxes.”