Nigeria’s economy is facing a renewed strain as global oil prices plummet, reaching levels reminiscent of the devastating downturn experienced during the peak of the COVID-19 pandemic.
This sharp decline is triggering significant concerns about the nation’s fiscal stability, given its heavy reliance on crude oil exports.
Brent crude, global oil price, fell by 5.09 percent to $59.62 per barrel at 12.30 WAT while US West Texas Intermediate fell by 5.54 percent to $56.28 per barrel on Wednesday.
The recent decline in oil prices follows China’s decision to raise tariffs on the United States goods to 84 percent, up from 34 percent, effective April 10 – a retaliatory move after President Donald levied 104 percent duties on Chinese imports.
Beijing has consistently opposed tariff rises and said Wednesday it would take ‘firm and forceful’ steps to protect its interests.
Its finance ministry later said in a statement that ‘additional tariff rates’ on imports originating in the United States would ‘rise from 34 percent to 84 percent,’ effective from 12:01 pm on Thursday.
“China’s aggressive retaliation diminishes the chances of a quick deal between the world’s two biggest economies, triggering mounting fears of economic recession across the globe,” Ye Lin, Rystad Energy vice president for oil markets, told Reuters.
“China’s 50,000 bpd to 100,000 bpd of oil demand growth is at risk if the trade war continues for longer. However, a stronger stimulus to boost domestic consumption could mitigate the losses,” the analyst added.
For Nigeria, which gets about 90 percent of its foreign exchange earnings from oil exports, that amounts to a significant lost income.
