Nigeria's Finances Feel Oil Price Strain

摘要

Falling oil prices are beginning to hurt Nigeria. Since 2002, the government has seen a significant improvement in its finances, owing to higher oil and gas revenues and the clearance of some $30.9 billion in external debt in 2005, which turned the country into a net external creditor. However, the economy has remained heavily reliant on the energy sector and a lack of diversification in the economy has provided no other significant sources of tax revenue or foreign exchange.rnAs oil prices have fallen Nigeria has had to halt further sharing of the savings from previous oil windfalls with the country's three tiers of government, and it is likely that a lack of government funds could hold up some oil and gas projects. The drop in oil receipts coupled with declining oil production saw foreign reserves plummet in February to a ten-year low of $4 billion, compared with $60 billion in the same period in 2008, according to government sources. Abuja has even turned to oil major Shell for a $3.1 billion loan to plug funding gaps in its joint venture projects.rn"The federal government has directed that the states will no longer [get a] share from the excess crude oil account to augment their monthly allocations," an official said. "They [states] will have to make do with the regular income because the government will no longer dip into the excess account to augment the allocation to the states," the source added.