Word: nigerias
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...dangerous collapse of Nigeria's petroleum prosperity
...price hawks in the 13-nation Organization of Petroleum Exporting Countries, Nigeria for years kept the oil-consuming nations of the world over a barrel by forcing world oil prices relentlessly higher. Now that demand for petroleum is slumping on markets everywhere, however, the price of crude has dropped from $40 per bbl. to $28 per bbl. on the unregulated spot market. As a result, the economic outlook for the 90 million inhabitants of Nigeria, black Africa's wealthiest and most populous nation, has suddenly turned bleak...
...Nigeria depends on oil exports for 90% of its foreign exchange earnings and 85% of its government revenues. But weakening worldwide demand for crude has forced the country to slash production from 2.1 million bbl. daily to fewer than 900,000 bbl. by last week. In the process, estimated earnings from oil exports have plunged from $ 1.35 billion per month only a few weeks ago to perhaps as little as $700 million at current production levels, and the country has been compelled to dip deep into its foreign reserve holdings. Nigeria is now paying more than $1.8 billion each month...
...more direct and effective cutbacks will probably be needed if the economy is to avoid careening out of control. But it is uncertain whether the soft-spoken and shy Shagari will be politically able to take the necessary steps. Shagari's free-market oriented National Party of Nigeria came to power in 1979 after elections ended 13 years of military rule. Since then, Shagari has pressed ahead with a program of rapid industrial and social development that cannot now be rolled back without alienating Nigerians...
...past two years, weakening worldwide demand for oil has driven down the spot-market prices for crude until they were about $6 per bbl. below the official OPEC benchmark price of $34 per bbl. If prices continue to slide, cash-hungry producers such as Algeria, Venezuela and Nigeria will be tempted to offer under-the-table deals to potential customers in order to take sales away from other cartel producers. To monitor compliance, OPEC decided to set up an oversight committee that will keep tabs on weekly production figures of all members...