How to insulate Nigeria from Oil Price Shocks

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The Nigerian economy has always thrived with huge revenue generated from the oil sector. It is said that revenues from oil sector accounts for over 70% of the country’s foreign exchange earnings.

However, with the devastating effects of the Coronavirus that has crippled virtually all sectors of the economy, there has been calls for total diversification from oil.

Only recently, the minister of finance, budget and national planning said the country expects to see negative growth for both second and third quarter of the year, which will mean that Nigeria may possibly slip into another recession for the second time in four years.

The rationale behind this is the sharp drop in oil prices and the compliance with OPEC production cuts by over 300,000 barrels per day.

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