Coronavirus: How drop in oil price affects Nigeria’s economy
Despite the absence of reassuring words from the Federal Government, Nigerians have cause to be concerned, as the global spread of coronavirus, also known as COVID-19, and the continuous drop in the price of crude oil in the international market would definitely take a heavy toll on the Nigerian economy. Specifically, it is no longer news that oil and gas account for over 90 per cent of Nigeria’s foreign exchange earnings and more than 60 per cent of the country’s oil earnings, and presently, with developments in the international market, oil and gas, Nigeria’s major revenue-earner is currently under threat.
Because of the spread of coronavirus, many countries, such as China, Japan, India, France, Italy and Germany, among others, have curtailed movements of their citizens, through shutdowns, cancellations, lockdowns, and restrictions placed on large gatherings.
These restrictions are taking toll on these
countries, forcing a slowdown in the economic activities of these countries and
also negatively affecting their consumption pattern, especially their
consumption of petroleum products.
The combined drop in
petroleum consumption in these countries is what is currently forcing a
slowdown in global demand, especially the demand for crude oil.