Friday, August 28, 2020 /06:20
PM / by Tstevana Paraskova of Oilprice.com / Header Image
Nigeria is preparing for an extended period
of low oil prices, Muhammadu Buhari, the president of the biggest oil producer
in Africa, said at an energy event on
should diversify away from oil, on which it is heavily reliant for foreign
exchange income, the president added. Africa's top oil producer, which is also
the biggest economy on the continent needs to develop non-oil sectors to
diversify its revenues, Buhari said, as quoted by Nigerian media.
and gas industry continues to be a significant contributor to Nigeria's
economic development and economic growth, representing some 10 percent of gross
domestic product (GDP), the president added.
like other oil-producing countries, is suffering from the double whammy of the
coronavirus-related economic slowdown and the oil price crash.
collapse in oil prices and oil demand, and the new OPEC+ production cut deal - with which Nigeria has yet to comply fully - have crippled Nigeria's
government revenues, more so than in some other countries, because crude oil is
Nigeria's largest source of revenues.
second quarter of this year, Nigeria's economy shrank by 6.1 percent year over year due to the low oil prices and the lockdowns
in the country to curb the spread of the coronavirus.
the OPEC+ deal began in May, Fitch Ratings said that Nigeria's participation in the deal would result in "deeper economic contraction and fiscal deficits and compound pressures on
external finances from the slump in oil prices."
fiscal breakeven oil price - the price of oil at which Nigeria balances its
budget - is very high, at US$133 per barrel, given remarkably low non-oil fiscal intakes, Fitch has
According to the World Bank's latest
update on Nigeria from June 2020, the collapse in oil prices coupled with the
pandemic are expected to plunge the Nigerian economy into the most severe recession in
four decades-the worst since the 1980s.
The post Nigeria
Prepares for an Extended Period of Low Oil Prices first appeared in Oilprice.com on August 28, 2020.
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