U.S. stands ready to help diversify Nigeria's economy

Nigeria's economy facing negative pressure from the decline in crude oil prices, IMF warned.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |  March 30, 2016 at 9:07 AM
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WASHINGTON, March 30 (UPI) -- The United States stands ready to assist Nigeria in diversifying its economy beyond the oil sector, a regional U.S. secretary said from Washington, D.C.

The International Monetary Fund warned the impact of lower crude oil prices were adding pressure to a Nigerian economy in need of deep structural reforms. The country's oil-dependent economy has struggled under the strains that have emerged since crude oil prices first dropped below the $100 per barrel mark in 2014. From the pressure of oil prices alone, the government's deficit doubled to about 3 percent of the gross domestic product last year.

About half of the Nigerian population lives on less than $1.25 per day. Plagued by problems ranging from terrorism to corruption, the country has been struggling to address deep-rooted economy gaps.

Linda Thomas-Greenfield, the U.S. assistant secretary for African Affairs, told officials gathered at the U.S. Institute of Peace the country has an "incredible" opportunity for growth if it utilizes its natural resources, including oil and gas, effectively. For inclusive and broad-based expansion, however, she said Nigeria needs to look beyond energy.

"There are areas in which we stand ready to partner with Nigeria to help the government advance important goals, including increasing non-oil revenue," she said.

In early March, Nigerian Petroleum Minister and Director of the Nigerian National Petroleum Corp. Emmanuel Kachikwu said the state oil company would be divided into 30 independent companies in an effort to address corruption and revenue losses.

Nigeria is the No. 8 oil exporter to the United States, behind Kuwait, sending 78,000 barrels per day to the country for the week ending March 18. That's down 251,000 bpd from the previous week, but up substantially from the 14,000 bpd sent during the same week last year.

Full-year Nigerian oil production has held steady at around 1.8 million bpd, though energy companies working in the country have had to halt operations at times because of security threats.

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