Nigeria’s oil earnings are heading south as the country battles poor second quarter earnings due to the coronavirus pandemic that has affected global sales and seen crude shipments stranded at sea, with no buyers, due to lockdowns across the world.
Finance Minister Zainab Ahmed and budget officials on Tuesday said the country is losing more than 80 percent of its revenue due to plummeting oil prices and the coronavirus epidemic.
Nigeria depends on crude oil sales for 70 percent of government revenue and 90 percent of foreign exchange earnings but a price war between Russia and Saudi Arabia and overproduction has sent the oil prices on a downward spiral.
“Our projected oil revenue has declined by over 80 percent,” said Ben Akabueze, the head of the Budget Office, in a video conference in Abuja.
“We have now had to revise our budget down to $20 per barrel,” he said. “Our estimated net oil and gas revenues are down now from 5.47 trillion naira – $14.1 billion or 12.9 billion euros – to 1.12 trillion.”
Finance Minister Ahmed said the country was “facing the twin challenges of the COVID-19 pandemic as well as the crash of the crude oil price.”
She said a further review of the benchmark price which was reduced to $30 from $57 in March, was on the cards.
“Now we are actually in the process of making an amendment bringing down that revenue key indicator to $20 per barrel,” she said.
Nigeria produces around two million barrels daily.
The country emerged from a recession in 2017 and is struggling to finance its budget and pay its bills.
On Monday, Nigeria said it had received $311 million stolen by former leader Sani Abacha from the United States and Jersey.
The recovered funds will be spent on infrastructure projects, including roads, a key bridge and power plants, according to officials.
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