The Presidency has dispelled fears over report of an impending collapse of Nigeria’s economy as a result of the drop in the sales of crude oil to the United States.
The Senior Special Assistant to the President on Public Affairs, Dr Doyin Okupe on Tuesday at a media briefing in Abuja, said the discovery of shale oil by the United States Government does not call for crying wolf where there is none.
While acknowledging that the Nigerian economy is also facing challenges like other nations, Dr. Okupe however assured that measures are being taken to mitigate the impact of the decline in the US market.
According to him, government is now exploring Europe and Asia markets to beef up the shortfall from the US market, insisting
“It is unfair and incorrect for anyone to suggest an impending collapse of the economy on the basis of a drop in crude oil sales which is not within the control of any single Nation, without taking into account current efforts by government to diversify the economy as well as fiscal measures which have resulted in inflow of over 14 billion dollar new investments in the non-oil sector of the economy as well as other favorable ratings of the Nigerian economy by International rating agencies.
“The inviolable truth is that the Nigerian economy, like the economy of other Nations has its challenges which the Jonathan administration has courageously and innovatively been tackling with measurable, obvious and clearly tangible positive results in the last two years.
“We wish to assert that the degree of transparency and forthrightness which this administration has displayed in the management of the economy in the last two years as well as the various fiscal policies, reforms and programmes adopted by the Jonathan administration since its inception do not give room for fears that the economy might in any way be endangered.
“Already, the Federal Government is adopting appropriate strategies to effectively mitigate the impact of decline in the US markets,” he said.
The Presidential aide also explained further the recent boost in trade between Nigeria and Europe on one hand and Asia on the other hand.
His words, “The number and volume of term contracts with Asian refiners is gradually being increased. Current term volumes to Asian refiners stand at 120,000 barrels per day .In both the short and medium term, a combination of market openings in Europe and Asia will effectively compensate the loss of US market and offer needed support for Nigerian crude oil exports.
“Nigeria’s total National crude oil production is 2.06 million barrels per day. Europe has become a major destination for Nigerian crude oil cargoes, with the volume of Nigerian crude oil grades going to Europe increasing from 28% in 2011 to about 38% in 2012.
“A major factor for the growing demand of Nigerian crudes in Europe has been the Free Trade Agreement between Europe and South Korea. It is more profitable under this Agreement to sell North Sea crude oil grades to Korea. Many companies prefer to trade their cargoes in Korea thus creating shortfall in Europe.
“In addition, the North Sea as a whole is recording annual natural decline from matured field of about 10%. In the same light, Asia’s demand for light sweet grade is raising, stepping up demand for Nigerian grades. India in particular is consistently taking an average of 120,000 barrels per day from Nigeria”.
He therefore, enjoined Nigerians not to panic, adding that the Jonathan administration has also implemented key reforms to reduce dependence on oil, noting that the reforms have resulted in the Agricultural sector alone contributing over 40% to the Gross Domestic Product in two years.