By: Ivana Kottasova
Nigeria is considering asking the World Bank, the African Development Bank and other international organizations for help to plug a hole in this year’s budget created by the collapse in crude oil prices. The government said it is looking to borrow as much as $9 billion to fund its cash-starved economy.
The 75% plunge in crude prices to around $33 per barrel means Nigeria is now losing money on some of the oil it pumps.
Nigeria is the second major oil producing country, after Azerbaijan, to admit it might need emergency financing because of low crude prices.
Nigeria, Africa’s largest economy, is also the continent’s biggest oil producer. The sector accounts for about 35% of GDP, 75% of government revenue and 90% of export earnings.
Its currency is plummeting, with foreign exchange dealers offering much higher rates than the official 199 nair per dollar. The government has been burning through its foreign currency reserves, which fell to $28 billion at the end of January from $43 billion two years ago. Click here for full article