This archive report was first published on 19 May 2020.
According to Bismarck Rewane, a member of President Buhari's Economic Advisory Council, Nigeria's economy is bracing for a 3.4% contraction in 2020 due to a decline in oil prices and demand for the product.
Oil accounts for 90% of Nigeria's exports, 30% of banking sector credit, and contributes 50% of the government revenues. In January 2020, oil raked in $434.85 million, as per data from the Nigeria National Petroleum Corporation.
As a result, a decline in oil revenues is likely to put pressure on fiscal spending, with total external debt expected to rise to $36 billion in 2020. This, in turn, will increase the debt service burden, which is already in excess of 96% of independent revenues.
Published on May 19, 2020, the International Monetary Fund (IMF) predicts that Nigeria's public debt will rise to 34.8% of gross domestic product this year, from 29.1% in 2019, and will peak at 37.4% in 2022.
Nigeria, Africa's biggest oil producer, is facing foreign exchange pressures due to the crash in global oil prices. The Central Bank of Nigeria has been forced to devalue the naira to 360 to the U.S. dollar, down from 306, as oil sales, denominated in US dollars, contribute 90% of Nigeria's foreign exchange.
