As paltry oil revenues and a global lockdown forces see the country’s petroleum price to a record low of $20 a barrel, Nigeria’s economy is expected to contract by 3.4% this year, government officials have declared.
This is a poor outlook for a sector that, over the past decade, has experienced unprecedented growth in local capacity.
In 2010, Nigeria enacted legislation to boost the number of locally-owned and managed companies in the multi-billion dollar industry, overseen by the Nigerian Content Development and Monitoring Board.
Managing director of the Lagos Deep Offshore Logistics Base, Amy Jadesimi, says the act was “instrumental” to a shift in the market to a place where so-called local content is compulsory.
Africa’s top oil exporter relies on crude oil sales for around 90% of foreign exchange earnings and more than half of government revenue.
Due to the current outlook, the country’s Finance Minister, Zainab Ahmed declared that Nigeria will cut its budget by around 15% and that major oil and gas projects will be delivered “much later than originally planned”.
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