Let’s face reality. The rapid spread of the COVID-19 results to a massive hit to the world’s economy. Business activities aren’t running or yielding as they used to before the virus outbreak. For this reason, you have to keep tabs with trade and market stand. For instance, here is a silver boost for Nigeria economy as they record higher oil flows.
Despite the negative impact of the pandemic, Nigeria GDP increases by 1.87% in this year’s first quarter compared to the previous 2.55%estimates. Similarly, according to the Abuja-based National Bureau of Statistics Monday news, oil production shoots to 2.07 million barrels per day. The slowdown reflects the effect of economic disruption by the pandemic. The truth is the number reduces as people are lockdown in homes, with minimal travels.
Nigeria maps its oil production.
According to a Bloomberg survey, the median estimates of three economists reveal a 0.8% expansion. Conversely, the Gross domestic product contracts by 14.27% in the fourth quarter.
Although the world’s crude oil prices drop in the first quarter, Nigeria ramps up oil production. Consequently, Nigeria aims at a silver compensation for the fall in income caused by the Coronavirus outbreak. Oil output in Nigeria sees a rise to 2.07 million barrels in a day for the first quarter of last year.
Indeed, this is the highest production level since the start of 2016. A year before, the oil sector grew by 5.06% compared to the preceding year. On the other hand, the non-oil growth rate drops to 1.55% compared to 2.47% from the previous year. Still, the push in crude oil prices will affect this year Africa’s economy. To this end, GDP may contract by 3.4% in 2020, which is the most in at least four decades.
Nigeria’s Budget plans.
Generally, Oil production in Nigeria contributes to less than ten percent of its GDP. However, it accounts for half of the nation’s income as well as ninety percent of foreign exchange income. The African crude oil giant producer cuts its price by half to hit a budget of $25 per barrel. Besides, the country tries to keep spending targets most intact. Sure, this is a step that might lead to more borrowing to finance their fiscal plans.
Furthermore, Nigeria average oil revenue declines by $326 million in the first quarter. According to Finance Minister Zainab Ahmed, this is an indication of the economic challenges due to the pandemic. The truth is crude oil prices are down since travel across the nation is down as well. Mr. Zainab also says the economic headwinds might cause an economic contraction of 8.9%.
Conclusion
Sure, this is the era of heightened geopolitical risks. Moreover, relationships and trade between countries are down. Again, the pandemic tension limits the scope of oil production. To this end, some states might opt for the cold war, but let’s stay focused on actions to help us.
As we wait for the movement restrictions ease, it’s smart to get ready for the new market. Although the virus outbreak may have a long term impact on the economy, let’s hope the oil distribution consumption gets to its peak once more.
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