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Nigeria, other African oil exporters to lose $34b from COVID-19 pandemic – IMF

NIGERIA and other African oil exporters are expected to experience an estimated loss of $34 billion in revenue  as a result of the COVID-19 pandemic which led to crash in the  global crude oil prices.

“The continent is set to lose $34 billion for African oil exporters or a loss of more than a third, this will push the public debt burden to more than 65 per cent of GDP in 2020 on average, with a particularly fast increase in oil exporters,” said Abebe Selassie, the International Monetary Fund (IMF), African Department, Director.

He stated this at the Africa Ministerial Roundtable on COVID-19 impact on the energy sector in Africa.

Selassie further stated that African governments would experience budget pressure and an increase in debt which will be higher among oil-exporting countries.

He warned  that if the pandemic is prolonged, it could transform the continent’s demand for energy.

“The shock is certainly crippling fiscal resources in the short run, but it should not be allowed to wipe out the achievements in terms of human development over the last two decades,” Selassie stated.

The IMF chief announced that since the 2014 oil price collapse, production and investments of most African oil exporters had been on the decrease.

“The recovery on the continent depends crucially on investing in renewable energy which offers huge potential in terms of badly needed jobs and acquiring new technological capabilities,” he said.

In another development, the United States Department of State in its annual Fiscal Transparency Report for 2020 described Nigeria’s state-owned oil company, Nigerian National Petroleum Corporation, (NNPC) records as “opaque”.

The report noted that the NNPC did not make full disclosure of its audited financial reports available to the public despite releasing a 2018 audit report on its website.

“Actual revenues and expenditures varied significantly from estimated figures making budget documents unreliable,” the report stated.

The report also recommended an improvement on the reliability of budget documents by producing and publishing a supplemental budget when actual revenues and expenditures do not correspond to those in the enacted budget and making full audit reports for significant, large state-owned enterprises publicly available.

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