As the oil tide goes out, African oil producers find themselves in difficult times but importers have an unexpected economic boost, writes DIANNA GAMES
Published in Good Governance Africa, 31 March 2015
As oil prices dipped below $50 a barrel in January, Nigeria’s finance minister put a brave face on her country’s revenue crisis. Nigerians, she said, should start thinking of Africa’s largest oil producer as a “non-oil country”.
Ngozi Okonjo-Iweala’s call was an appeal to prioritise other, less volatile sectors to drive growth and reduce the country’s reliance on oil, a commodity that has dominated the Nigerian economy for decades with little to show for it.
Like other oil-dependent economies, Nigeria bases its budget on the benchmark price per barrel of oil. Last year, Nigeria optimistically moved the benchmark price from $77.5 to $65 in the hope that this would rescue the 2015-2017 Medium Term Expenditure Framework. But shortly afterwards, policy makers looked on with dismay as prices plummeted below the new yardstick to hit nadirs last seen in 2009.