South-South Coordinator, Institute of Chartered Economists of Nigeria, Mr. Friday Udoh, told KELVIN EBIRI that Nigeria’s economy would remain susceptible to the volatility of global oil price unless it is diversified. While observing that prolonged oil glut will be disastrous for the 2020 budget, he recommended adoption of crude oil swap for projects, as an alternative means to fund critical infrastructural projects.
Nigerians seem to be in a panic mode regarding the oil war between Russia and Saudi Arabia. Why?
The reason Nigeria is in a panic mode is that when there is oil glut, which means too much supply, there is bound to be a crash in price. Besides, there is the coronavirus pandemic. There is always a boom and burst in the commodity market. You shouldn’t have 100 per cent belief that commodity market price would always be stable because a lot of fundamentals determine this.
Presently, the coronavirus is a contributory factor. If you look at the United States today, they have moved from the export of crude oil to import. Once in a while, American refineries look for crude from Nigeria. America has sufficient crude oil and has been able to meet domestic demand. At the same time, it could export. Saudi always prefers the price to be better, when there is no glut in the international market.