COVID-19 could cost Nigeria up to $19 billion in lost oil revenue

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Oil workers walk through pipe installations on a tanker at Bonga off-shore oil field outside Lagos, file. REUTERS. Nigeria is Africa's largest economy.
Oil workers walk through pipe installations on a tanker at Bonga off-shore oil field outside Lagos, file. REUTERS. Nigeria is Africa’s largest economy.

The Economic Commission for Africa (ECA) has warned that COVID-19 could reduce Nigeria’s total exports of crude oil in 2020 by between US$ 14 billion and US$ 19 billion, even as the body said the spread of the virus could stall economic growth in Nigeria and other African countries.

The ECA Executive Secretary, Vera Songwe, who disclosed this in Addis Ababa on Friday during a press conference, said the total loss of revenue by African oil-exporting countries as a result of the novel coronavirus disease could be up to $65 billion.

She said 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.

According to the Executive Secretary, COVID-19, having already hit China, which is Africa’s major trading partner, would inevitably impact Africa’s trade.

Songwe also added that a decline in commodity prices could lead to fiscal pressures for Nigeria, South Africa, Algeria, Egypt and Angola.

She noted that revenue losses, which the slow economic growth would foist on the continent, could result in unsustainable debt for many countries.

Songwe added that Africa would require as much as US$ 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 from fuels cascading by about US$ 101 billion in 2020, remittances and tourism will also be affected as the virus continues to spread worldwide, “resulting in a decline in FDI flows; capital flight; domestic financial market tightening; and a slow-down in investments – hence job losses.”

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