Falling Oil Price and Nigeria

Globally, the price of oil has been consistently sliding since the past 2-3 years, raising concerns among the global investors. Among the many reasons for this reduction in oil price is the increase in the availability (supply) of oil, and this is making a lot of stakeholders nervous.

To compare the oil price in the last few years, price of U.S. crude CLc1 per barrel has fallen from by $1.32 and costs $38.07 now, whilethe Brent crude LCOc1 oil price has fallen by $1.2 and costing $39.07 now. Obviously, the investors aren't happy about this decline due to its several negative repercussions including loss of jobs for over 250,000 workers and bankruptcy of several global oil companies. 

The fall in oil price also has an impact on the economy of countries whose major revenue is dependent on oil. Nigeria is one such country, and its President Muhammadu Buhari recently suggested to the government of South Sudanto not rely solely on oil revenues. President Buhari has urged them to find other sources of increasing the country's revenues, such as agriculture.

President Muhammadu Buhari was receiving the outgoing South Sudanese ambassador to Nigeria, Mr.Riak, when he made this statement.He commented on how heavily Nigeria had been depending on oil based income since the past several decades, due to which the decline in global oil prices has severely affected the country's economy. His advice was that instead of oil, South Sudan should grow its economy by means of agricultural development. Nigeria's oil-dependent economy has seen a decline in growth (from 6.3% in 2014 to only 2.7% in 2015), mainly due to the oil price drop across the globe. President Buhari was also critical of the Peoples Democratic Party, which had formed the previous government. He said PDP didn't save enough during their rule in spite of the fact that Nigeria was once earning as much as over $100 per barrel, due to which the country is now facing economic troubles.

Mr.Riak also spoke at this event and mentioned how fruitful his four-year long stint had been in this role. He also said that since his country was blessed with a lot of fertile land, it would be good if Nigerian companies were to investin South Sudan for agricultural ventures.

Nigeria is currently reeling under the Boko Haram terrorism and has suffered massively in the last few years- both socially and economically. And hence, President Buhari's efforts to develop powerful allies are understandable.