August 2016
Overview
Since the discovery of petroleum in Nigeria in 1956 at Oloibiri in the Niger Delta region of the country, the Nigerian Government has invested extensively in the oil and gas sector leading to the country’s dependence on the proceeds of petroleum exports, which account for about 90% of its gross earnings. The result of this development is that the Nigerian Government has, over the years relegated the non-oil export sectors of the economy with minimal investment in these sectors.
In light of the recent volatility in the price of petroleum products and oil price crash in the international market, the Nigerian economy has been put under severe pressure, particularly as the country depends on the proceeds of its oil exports to fund its budget and foreign exchange reserves and, therefore, relies substantially on crude oil exports for its yearly expenditure.
Various administrators have, over the years, indicated their willingness to place less reliance on crude oil exports, and to diversify the economy. For example, in April 2010, the Central Bank of Nigeria (“CBN”) during President Goodluck Jonathan’s administration established the ₦300 Billion Power and Aviation Intervention Fund in a bid to catalyse the financing of the real sector of the Nigerian Economy.
This article was published in King & Wood Mallesons’ Made in Africa Publication, Issue 15, July 2016.
Click here to read the full publication on Page 48
