Nigerian economy may face credit crunch
The African Development Bank (AfDB) has warned that the Nigerian economy may face credit crunch in months ahead as the country’s crude oil production declined further by 150,000 barrels per day (bpd).
The AfDB stressed that the continued crude oil theft and vandalism of oil pipelines as well as recent developments in the global oil market posed a significant threat to the sustainability of the country’s financial position with respect to oil revenues.
The bank gave this warning in its monthly “Nigeria Field Office” (NFO) report, stating the country’s continued reliance on crude oil and gas exports which accounted for 94 percent of export earnings made it difficult to achieve its set targets in crude oil revenues as well as to sustain progress in storing oil reserves.
It said: “The extreme dependence on the highly volatile petroleum income has a strong negative impact on sustaining macroeconomic stability and on growth performance.
“Closely linked to this concern is the need to create conditions for a further significant public and private investment in the non-oil economy, along with improvements in the productivity of this investment.”