COVID-19: Nigeria to Lose $20bn in Crude Oil Export Revenue
By Adedapo Adesanya
Nigeria’s total crude oil export for 2020 has been projected to fall by almost $20 million due to the COVID-19 pandemic, according to the United Nations agency, Economic Commission for Africa (ECA).
Executive Secretary of ECA, Ms Vera Songwe, noted over the weekend in Addis Ababa, Ethiopia that oil dependent economies on the African continent may find their economies affected with the continuous spread of the virus as a result of loss of revenue.
She added that the total revenue African oil exporting countries will lose due to the coronavirus could amount up to $65 billion and with Nigeria, Africa largest producer, losing the largest.
“Africa may lose half of its GDP with growth falling from 3.2 percent to about 2 percent due to a number of reasons which include the disruption of global supply chains,” she said.
Ms Songwe also added that a decline in commodity prices could lead to fiscal pressures for Nigeria, South Africa, Algeria, Egypt and Angola.
According to the Executive Secretary of the commission, COVID-19, having already hit China, which is Africa’s major trading partner, would inevitably impact Africa’s trade.
She noted that revenue losses, which the slow economic growth would put on the continent, could result in unsustainable debt for many countries as many including Nigeria have taken to borrowing to fund its spending.
Ms Songwe disclosed that Africa would require as much as $10.6 billion in unanticipated increases in health spending to contain the spread of the virus.
According to the ECA boss, while COVID-19 could lead to Africa’s export revenues due to fuels falling by about $101 billion in 2020, remittances and tourism will also be affected as the virus continues to spread worldwide.
“This will result in a decline in foreign direct investment (FDI) flows; capital flight; domestic financial market tightening; and a slow-down in investments – hence job losses,” she submitted.
Similarly, it was disclosed that pharmaceuticals, imported largely from Europe and other COVID-19 affected partners from outside the continent, could see their prices increasing and availability reduced for Africans.
ECA said with nearly two-thirds of African countries being net importers of basic food, shortages would severely impact food availability and food security, adding that negative consequences could worsen if the virus leads to an outbreak on the continent.