Oil slump reveals structural defects in Nigerian economy

Oil slump reveals structural defects in Nigerian economy

The slump in oil prices would not have hit Nigeria so hard if the country had sufficiently diversified its economy and created an industrial base for refining its crude locally.

Oil importers from India to China and Morocco, are benefiting from a fall in oil prices, which is cutting into energy costs and giving a boost to their domestic economies.

“The sharp drop in petroleum prices is a huge boon for most African countries, but the continent’s oil-producing countries can expect hard times,” said James Stent, of research firm Good Governance Africa (GGA) in a Nov 26 note.

“Only a few countries on the continent have developed a diverse set of export products. More countries should follow Morocco’s example and create less vulnerable economies.”

Refined petroleum was the most valuable merchandise import in Nigeria in the second quarter of 2014, according to data from the National Bureau of Statistics (NBS).

The country imported N315.68 billion ($1.87 billion) worth of Motor Spirit (gasoline) in the second quarter of 2014.Oil has fallen into a bear market, fueled by supply gains from U.S production reaching a 30 year high. Brent, which peaked around $115 a barrel on June 19, has plunged by 32 percent this year.Falling crude […]

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