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THE OIL PRICE FALL AND THE IMPACT ON THE NIGERIAN ECONOMY: A CALL FOR DIVERSIFICATION
Abstract
The impact of the oil price fall is felt all over the world and affected the world’s financial market. Nigeria miraculous financial survival during the financial crisis was due to the dependence on the protection offered by its huge and enormous oil resources which was the source of its major wealth for foreign exchange earnings and revenue. This came at a time when the oil price was lucrative at the international market, as against subprime mortgages which some countries largely engaged upon on which led to the financial burst. Conversely, the non diversification of the Nigeria economy was also a reason while the aftermath of the financial crisis touched the Nigeria banking sector. In this recent time of falling oil prices, the impact is felt on the Nigerian economy through inflation, job loss and Naira depreciation. This is because; Nigeria is a mono economy, dependent on oil importation and exportation for its survival. Therefore, the oil price fall calls for an inward looking into the Nigerian economy and the need to shore up the non-oil sector to boost exportation of Nigerian products. In lieu of this, this article recommends diversification to some identified key sectors in the economy to prevent the economy from taking the hit caused by the falling oil price as a way forward, and a rigorous and holistic improvement in those sectors.
Keywords: Oil price fall, Banks, Economy, Financial crisis, Diversification, Economic policy