Fluctuating oil price raises new concerns for Nigeria economy
Black Friday saw a plunge in global oil prices that has raised new concerns for Nigeria’s economic well-being as the economy is highly dependent on oil.
The commodity accounts for over ninety percent of Nigeria’s total export and without oil revenue, it’s almost impossible to run the country effectively.
Nigeria had drifted into recession with the initial decline of oil prices in 2016 and there was only a little bit of relief when the prices improved in mid 2017.
Reports indicate that Brent crude, the international oil standard experienced a $3 decline on Friday from its original price of just over $60 to about $58. Although the prices have gone back up to $60 this Monday morning, most stakeholders are not optimistic about any further increase.
If anything, they believe there’s a looming plunge in the price of oil globally and that this is bound to affect Nigeria economy negatively.
The Federal Executive Council had pegged the 2019 budget at the projection of $60 per barrel with the expectation that prices will not go below that threshold.
But as the prices keep fluctuating, Mr. Birsmarck Rewane, the Managing Director of Financial Derivatives Company Ltd. maintained that the government will have to modify the budget to meet the present realities.
“Even at $58, you can still get by but it is quite imminent that you have to make some adjustments,” he said.
There’s no definite answer on the question whether Nigerians should be really worried on the adverse effects of this new development.
