Europe South Asia Asia Pacific Americas Middle East Africa BBC Homepage World Service Education



Front Page

World

UK

UK Politics

Business

Sci/Tech

Health

Education

Sport

Entertainment

Talking Point
On Air
Feedback
Low Graphics
Help

Friday, January 1, 1999 Published at 21:02 GMT


World: Africa

Oil prices threaten Nigerian economy

Nigerian living standards will be affected by the collapse of oil prices

The military government of Nigeria has unveiled a budget for 1999, warning that hard and painful decisions are necessary following the collapse of world oil prices.


The Nigerian leader, General Abdulsalami Abubakar, said that government revenue - heavily reliant on oil earnings - was likely to fall by about half.


Nigerian lawyer Razak Otuna: "The economy has been destabilised"
"The global decline in the international crude oil prices, the reduction in our Opec quota and the temporary closure of oil wells in the Niger-Delta led to a sharp reduction in government foreign exchange earnings from crude oil", Gen Abubakar said.

The country's budget for 1998 was drawn up on the premise that a barrel of oil, of which about two million are produced every day, would sell for US$17. The budget for 1999 is calculated on an oil price of barely US$9.


[ image: General Abubakar:
General Abubakar: "Sharp reduction in earnings"
The general said it was necessary to make some hard and painful decisions, arguing that these were necessary so that the incoming civilian administration - due to take power in May - should not be encumbered with unsustainable policies.

He said the country would have to cut back on its debt repayments and could no longer afford to repay the minimum wage for civil servants, a reform introduced in September.

But in a move that will impress Western donors and international institutions, General Abubakar has announced the immediate abolition of the dual exchange rate.

Under this system, certain privileged groups were allowed access to foreign exchange at a rate about four times cheaper than the general public.

As he admitted, this will remove a long-standing opportunity for personal gain at the expense of the public purse.

The BBC correspondent in Nigeria says that while the new moves show a willingness to tackle corruption, the public will be more concerned by the inevitability of falling living standards.



Advanced options | Search tips




Back to top | BBC News Home | BBC Homepage | ©




Africa | Americas | Asia-Pacific | Europe | Middle East | South Asia



Relevant Stories

31 Dec 98 | Africa
Hard time ahead for Nigerian economy

01 Jan 99 | The Economy
Nigeria's economy stagnates amid political turbulence

21 Dec 98 | Africa
Fuel price shock in Nigeria

06 Nov 98 | Africa
Fighting the oil firms





Internet Links


Federal Republic of Nigeria (Washington Embassy)

Nigeria Online

Free Nigeria Movement


The BBC is not responsible for the content of external internet sites.




In this section

Dam builders charged in bribery scandal

Burundi camps 'too dire' to help

Sudan power struggle denied

Animal airlift planned for Congo

Spy allegations bug South Africa

Senate leader's dismissal 'a good omen'

Tatchell calls for rights probe into Mugabe

Zimbabwe constitution: Just a bit of paper?

South African gays take centre stage

Nigeria's ruling party's convention

UN to return to Burundi

Bissau military hold fire

Nile basin agreement on water cooperation

Congo Brazzaville defends peace initiative

African Media Watch

Liberia names new army chief