Falling Oil Price and Nigeria

The oil prices have been steadily going down in the last couple of years, prompting a flurry of concern from the investors. This decline in oil price has come up as a result of the increase in supply of oil, making the investors grow weary.

As U.S. crude CLc1 prices fell by $1.32 to $38.07 and Brent crude LCOc1 from $1.2 to $39.07 per barrel, the investors were not happy. And with good reason, given how several companies have gone bankrupt since oil price took a plunge, and over 250,000 workers lost their jobs in the process. A meeting has been scheduled in April for the major global oil producers to discuss combating the fall in oil price by means of output freeze. It remains to be seen how fruitful this meeting will be though.

In other news from Nigeria, President Muhammadu Buhari has urged the South Sudanese government not to depend solely on revenues from oil, but try to explore other channels of growing the country’s economy such as agriculture.

President Buhari made this statement while receiving the outgoing South Sudanese ambassador to Nigeria in Abuja. He told the envoy that due to Nigeria’s heavy dependency on oil in the last several years, its economy has been severely affected by the ongoing fall in oil price. He advised that instead of depending on oil, they should aim to achieve economic stability as well as job and food security by investing in sustainable agriculture. Nigeria is currently reeling from the global oil price drop, and its economic growth has slowed down from 6.3% in 2014 to just around 2.7% in 2015. President Buhari blamed the opposition Peoples Democratic Party, saying that even when the country was once selling crude at over $100 a barrel, there were no savings by the previous government which is causing a lot of problems now.

In response to President Buhari’sadvice, ambassador Riak spoke highly of his four-year long stint as ambassador to Nigeria as very fruitful. He also agreed that since South Sudan was fortunate to have a lot of fertile land, any investment from Nigerian companies in relation to agriculture will be welcome.

President Buhari is known to form fruitful relations with internal as well as global leaders. As a result, he has been able to develop good friendship with the United States, which has become the largest foreign investor in Nigeria. Just a few weeks ago, the United States Secretary of States, John Kerry, announced that the U.S. will invest over $600 million this year in Nigeria as a developmental fund which will be dedicated to developing the country’s young leaders, fighting illiteracy and diseases like HIV/AIDS. This fund will especially prove useful since the country is still reeling from the effects of Boko Haram’s insurgency and terrorism, which has caused a lot of loss for the people of Nigeria, both economically and socially.