THE NIGERIAN OIL INDUSTRY AND THE CHALLENGE OF COVID-19 PANDEMIC
THE NIGERIAN OIL INDUSTRY AND THE CHALLENGE OF COVID-19 PANDEMIC

Summary/Abstract: The fiscal existence of Nigeria is predicated on accruals from the sale of crude oil. Any major threat to the oil industry in Nigeria comes along with major economic shocks and unmitigated consequences for the Nigerian economy. The outbreak of the Covid-19 pandemic was not only a global health challenge, but also caused unprecedented economic crisis. In specific terms, the global oil supply chain was disrupted and the pandemic had disproportionately impacted on the oil industry in Nigeria. The negative externalities of the pandemic on the Nigerian oil industry were overtly searing for the nation because of her mono-cultural economy. This paper therefore is therefore an analysis of the impacts and challenges of the Covid-19 pandemic on the Nigerian oil industry. The study adopted content analysis of extant literature, which were as well interrogated and interpreted and argued that the severity of the pandemic on the Nigerian oil industry is disproportional because the oil industry is not diversified as it is an enclave economy. Again, we found that because major inputs for the oil industry are sourced externally, with little local content, the industry was virtually grounded with untold effects by way of foreign exchange earnings for Nigeria. We concluded by stressing the need for diversification of the Nigerian economy, which can be achieved if the political leadership invest the rent from sale of oil on industrial manufacturing such as petrochemical and agro-allied industries in order to absorb the long-term shocks of the Covid-19 pandemic.

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