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‘Coronavirus Will Deny Nigeria, Others $4bn Revenue’

The raging Coronavirus pandemic will wipe at least $4billion revenue from Nigeria and other African countries economy through reduced demand for the continent’s exports, the NJ Ayuk, the Executive Chairman of the African Energy Chamber has said.

He attributed the revenue squeeze to the fact that China, Asia and Europe were reducing oil and gas consumption dramatically as transport and economic activities came to a standstill in light of the epidemic that already forced several dozens of millions of people to be put under quarantine.

He said :’’Last week, news reports indicated that oil traders in Africa were unable to find buyers for fifty-five Nigerian oil cargoes as global demand crashed. By last Friday morning, the virus had wiped the equivalent of USD$5 trillion in value from the global stock markets. That’s two and a half times the GDP of the whole African continent. And all that was before OPEC+’s Friday meeting in Vienna. Wasn’t that one surprising?

‘’I believe it is safe to say that few people could have expected this outcome. After all, for the last three and a half years, the world, and the oil industry in particular, had learned to trust the alliance of OPEC countries with Russia and other oil producers to work together to stabilise the markets and guarantee a sustainable price for the barrel of crude.

He spoke on the price war between Saudi and Russia, saying the situation looks bleak.

‘’If Saudi Arabia and Russia do go on having a price war, a $20 barrel is possible, if not probable’ ’he added.

He admonished African countries not to panic in view of the challenges posed by the spread of the virus, adding that situation would get better so soon.

‘’And surely, some oil dependent African nations will suffer with reduced revenue. Angola’s state budget, for instance, was designed for an oil price of $55 not $35. But ,we have survived the oil price crisis of 2014, and we will survive this one two.

He said most African producers have learned from the past experience and have adjusted themselves to respond to price crashes, adding that the progressive economic diversification the continent has witnessed in recent years will also contribute to minimize the impact of this situation.

Ayuk, who said 2020 is a challenging one for African energy, expressed optimism that next year will be a year of opportunity provided Africa and its leaders start adapting now and laying down the policies that will allow us to take advantage of the future opportunities in the global energy sector.

‘’So, for African nations, this is the time to position ourselves correctly, and that will require close attention to international developments and close cooperation, to be able to take advantage of new opportunities.