As Iran Crude Oil moves into the market: What is the fate of Nigeria Economy

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As Iran Crude Oil moves into the global market: What is the fate of Nigeria Economy?, United State and European Union sanctions on Tehran were finally lifted on Saturday, Which makes the Iranian economy $150 billion richer. Iran has been gearing up for this moment for months and could soon return to the top ranks of global oil producers. We could remember that Iran has been under sanction since 2013 from US & EU following their connection with building of uranium used in making of nuclear bomb.

However the price of crude oil has been quite unfavorable in the global market for months now, dropping to below $30 a barrel. There is no doubt that a flood of new oil from Iran will likely push them even lower in no distance time. According to Brenda Shaffer, a professor at Georgetown University in Washington, D.C. "Iran is able quickly to pull oil out of storage and from tankers floating at sea ... which it has an interest to do soon, since it is paying to store that oil,”. Iran’s oil minister Bijan Zanganeh is of the opinion that the country is aiming to increase output by close to 1.5 million barrels by the end of 2016, taking daily production to 4.2 million. 
Iran no doubt is a big member of the oil cartel OPEC and following some recent diplomatic tensions between Iran and Saudi Arabia; John Defterios and Mark Thompson is of the view that the situation might get more complicated. As Saudi Arabia, the de-facto OPEC leader is already struggling to keep its market share (by discounting the price of their crude oil to US) and Iran's ambitions coupled with their comparative advantage could put it under even more pressure. 
The question now is, where does Nigeria and her economy stand in the mix of all these dilemma?; the  proposal of N6.08trillion 2016 Budget by the Nigerian Government has generated divergent views among economic experts in the country. The budget which was based on a crude oil benchmark price of $38 per barrel and a production estimate of 2.2 million barrels per day for 2016. Nigeria in no doubt operates a mono-product economy and going by the state of infrastructures in the country many were of the view that N6 trillion will make little or no significant impact in the economy if nothing is being done to ameliorate the issue. Again the Nigeria exchange rate has been quite unfavorable in the global market following the depreciation of naira to the tune of N282 to a dollar in the parallel market last week.The Central bank of Nigeria in a recent measure lifted the ban on dollar deposit into commercial bank in order to ease trade and banned the sale of dollar to Bureau de Change operators which they believe had abandoned the original objective leading to their establishment, which was to serve retail end users who need $5,000 or less.
Mr. Shehu Mallam, (National President, Constance Shareholders Association of Nigeria) through his interview with Sunday Vanguard suggested that “For the economy to record tangible growth, government must embark on appropriate diversification. They should develop our infrastructure to maintain the diversification process. Also, government should give people proper orientation on the type of diversification they want to do. Creating jobs for the citizens should be given needed attention. The financial system must be strengthened to ensure prudent utilization of public funds. Without these things in place, no amount of money would keep the economy on the path of sustainable growth”. In summary I think Nigeria economy should prepare for the worst time because there are speculations that crude oil price could drop to $20 per barrel. Kindly share your view with us.

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