by Abisoye Shola..,…….
International Monetary Fund (IMF) has said that Nigeria’s oil and gas exports will dwindle by at least $26.5 billion as result of the coronavirus pandemic battering crude oil prices worldwide.
IMF explained that in a letter written by Nigeria requesting emergency financial assistance, the country blamed the drop in oil prices, and the economic shocks related to the new coronavirus pandemic has left Nigeria with an external financing gap of $14 billion.
Though, IMF early this week approved the $3.4 billion loan request for Nigeria but warned that Nigeria remained exposed to rising risks, particularly in oil markets.
“Rising unsold cargoes could also impact oil production, which could decline further through OPEC agreed cuts or if prices persist below production costs,” the IMF said.
According to IMF, Nigeria is also seeking additional funds from the World Bank, the African Development Bank, the Islamic Development Bank and Afreximbank.
International oil prices have fallen sharply as lockdowns aimed at stemming the spread of the virus has led to cutting down global fuel demand by roughly 30 percent. Nigeria is also in the midst of cutting oil output in line with an OPEC agreement with other major producers.
In its request letter, Nigeria also outlined plans to allow a “more unified and flexible exchange rate regime,” to increase its revenue to 15 percent of GDP and to move to cost-reflective electricity tariffs by 2021.
It also said a new fuel price regime, outlined in March, would permanently eliminate costly fuel subsidies. The subsidies cost an estimated 10 trillion naira ($27.78 billion) from 2006 to 2018.