BEYOND COVID-19: OTHER CHALLENGES

 

 

 

 

 

 

 

Drop in the price of oil: Nigeria is faced with an existential crisis in view of the recent crashes in the price of crude oil, resulting from the end of the OPEC+ agreement and the Covid-19 pandemic. The country is particularly vulnerable as it has not fully recovered from the previous crash in 2014. Nigeria’s 2020 budget is based on an anticipated oil price of $57 per barrel  (at exchange rate of N307 per dollar), but the decline in the price of the Brent benchmark crude has forced the government to revise this to $30/bl while maintaining proposed production volumes at 2.18mn barrel per day. Therefore, with the decline in crude oil price, the ability of the country to meet its N2.64 trillion oil revenue target has been curtailed by about 40 per cent, while the country’s budget deficit is expected to rise by about 40 per cent. Nigeria economy is still largely dependent on income from the oil which accounts for over 95% of export earnings and about 60% or government revenue. The government to avoid a major crisis and shutdown of the country might resort to drawdown of the already depleted excess crude account or borrowing both locally and internationally to meet its obligations. If this drop in oil price issues is not well managed, Nigeria might fall into another recession

Violent Deaths: The monthly violence incidents reports published by Nigeria Mourns shows that the spate of insecurity across the country has continued unabated in spite of the lockdowns, going by numbers of mass atrocities related violence across the country. See chart below:

 

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