Time for Nigeria to forget crude oil

Nigeria’s economy is in a tight corner, as Brent crude’s value has dropped by half since the worst pandemic in recent history started early this year.

Nigeria, Africa’s largest economy, is so over-dependent on crude oil that it makes up about 90% of its export earnings, and more than 60% of Nigeria’s Federal Government revenue. So when low prices, caused by the COVID-19 pandemic started, Nigeria’s economic growth paused.

The country has not been able to use its crude oil wealth to improve the living standards of its people, with a growing population of over 200 million.

The COVID-19 pandemic put Nigeria’s economy in a tight corner, as Brent crude’s value has dropped by half since the worst pandemic in recent history started early this year.

According to a report by a leading American consulting firm, McKinsey & Company, “The subsequent economic fallout for Nigerians will be severe. GDP forecasts are suggesting that if oil prices stay low, GDP growth will be -3.4% in 2020.

Worryingly, this is the prediction if the outbreak is effectively contained in the country. By contrast, if it is not contained effectively, then Nigeria could see GDP growth in 2020 fall to-8.8%, driven by declining consumer spending.”


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