Nigeria’s oil and gas export receipts in 2019 and 2020 may fall to $50 billion cumulatively with a $25 billion fall on year-on-on-year basis if the oil price settles for $35 per barrel for the rest part of this year.
Augusto & Co Consulting stated this in its April 2020 Macroeconomic report, which dwelt on “COVID-19 in Nigeria: Economic Perspectives and Mitigating the Risks”.
“The Federal Government of Nigeria has a benchmark crude price of $57 per barrel for the 2020 Fiscal Budget. Our preliminary forecasts have been built around an average price of $35 per barrel for the rest of 2020.
“Under this scenario, Nigeria’s oil and gas export proceeds may fall by half in 2020 to $25 billion on a year-on-year basis ($50 billion; 2019). This has led to genuine concerns not only for the naira but also the fiscal position of the federal government,” the report said.
According to the report, the consumption of energy has shrunk materially and has led to a supply glut in the crude oil market due to the lockdown enforced by major economies and the slump in international travels and local commute.
It noted that the ego battles between Saudi Arabia and Russian had led to the deterioration of the oil market, making a bad situation even worse especially for Nigeria who depends so much on oil revenue.