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President Muhammadu Buhari

Experts estimate $15.4bn revenues miss for Nigeria amid COVID-19, Oil prices plunge

Experts had projected that decline in global prices of oil would have adverse impacts on oil producing nations that rely heavily on petrol-dollar receipts to fund their budget.

In its review, Atlantic Council, a non-partisan organisation in the United States estimates revenues loss of $15.4 billion for Nigeria due to coronavirus pandemic and declining prices of oil.

Brent closed the month at $26.56 per barrel on 31 March, 2020 for MAY 2020 contract as analysts expect price to nosedive further.

Rising cases of coronavirus is impacting the economy negatively economic plus the fact that oil prices have dropped significantly in 2020.

In a report, Atlantic Council stated that African-oil producing and reliant countries have been among the hardest hit by the COVID-19 pandemic and declining oil prices.

The report posits that Nigeria poised for a major revenue loss, which was calculated to be 4% of its gross domestic products.

With the country having planned for an oil price of $57 in 2020, the low oil price presents massive struggles for Africa’s largest oil producer, Atlantic Council stated.

Recall that the Group Managing Director of the Nigerian National Petroleum Corporation, Mele Kyari said at a crude oil price of $22 per barrel, high-cost oil producers like Nigeria should count themselves out of the business.

To this, the Atlantic Council predicted that COVID-19 would cause the country to suffer the biggest lost in the continent with $15.4 billion, representing about 4% of the nation’s GDP.

It stated that a fair assessment considering the country has over $58 billion in oil projects set to suffer delays or cancellations.

Though the country is yet to announce incentives for continued oil exploration and production, it is set on protecting its oil production which contributes generously to its economy, it stated.

The council said the country’s petroleum regulator has, according to Reuters, ordered oil and gas companies to reduce their offshore workforce and move to 28-day staff rotations in order to avoid the spread of coronavirus.

“Nigeria is at risk to suffer the biggest loss.

“With the low oil price pushing the country to cut its budget and companies to reduce their capital expenditure, the global is waiting to see Nigeria’s next move,” said NJ Ayuk, Executive Chairman of the African Energy Chamber.

“Although it is hard to see the light for Nigeria, with the commitment of companies and resilience of the government, the country can certainly weather the storm, “he added.

Other countries that affected by the development are Angola, Senegal, Cameroon and Ghana.

Experts estimate $15.4bn revenues miss for Nigeria amid COVID-19, Oil prices plunge

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