Oil Price and Boko Haram Troubles for Nigeria

The last few years have seen a constant decline in the global oil price, which has created an environment of worry and speculation among the investors as well as major oil players. The main reason behind this development is believed to be an increase in the global oil supply, which is driving the oil price down and adding to the worries of stakeholders.

While the U.S. crude CLc1 oil price saw a decline from $39.39 to $38.07 per barrel and the Brent crude LCOc1 went down from $40.27 to $39.07. In fact, in the last couple of years several oil companies have had to pull down the shutter and lay off as many as 250,000 employees across the globe. To curb the growing sense of gloom in the industry, major international oil companies as well as other stakeholders organized an all-important meeting this April to discuss a number of important points revolving around the falling oil price. Whether they decide to limit the output or take some other measures to combat this situation remains to be seen.

Among the countries impacted the most due to decrease in oil price is Nigeria. Recently, its President Muhammadu Buhari had a meeting with the ambassador of South Sudan and brought up this topic in that meeting. President Buhari met with the South Sudanese ambassador to Nigeria in a farewell ceremony Abuja and mentioned the impact of oil on Nigeria’s economic conditions. President Buhari said that as a result of Nigeria relying heavily on oil for its economy since the last few decade, the country has been adversely affected by the current oil priceissues. He believes that South Sudan should try to avoid a similar fate by not depending only on oil based revenues, but should aim to find out other avenues of growing its economy, such as agriculture.

President Buhari also advised the South Sudanese government that in order to create a dependable agriculture output, they can look at opportunities for investing in Nigeria.

Nigeria saw one of the biggest economic slowdowns in last few decades when its economic growth slowed by around 4% from 2014 to 2015 (not just due to oil, but Boko Haram as well). Current Presidentbelieves that this situation has arrived in the country due to the previous government’s short-sightedness, which did not capitalize the time when Nigeria was selling crude at a price of more than $100 a barrel. Savings should have been done at such as time, but weren’t, due to which the country is now facing problems.