The Nigerian government may be facing more financial hurdles in the short to medium term as France President, Emmanuel Macron confirms that he and U.S President, Donald Trump have agreed to apply more pressure on oil producers to get oil prices down.
Oil Prices have gone up about 45 percent since the French President got sworn into office in mid- 2017; and his government is currently facing pressure from grassroots movements as a result of recent petrol tax hikes.
According to Macron on Wednesday: “When I talked at length with Donald Trump on Saturday in Paris, we together took the decision to put pressure on Saudi Arabia and other producers to limit prices.”
“If you look at prices these last few days, oil prices are starting to fall and I hope that this fall will continue,” he added.
Oil prices recovered some lost ground on Wednesday, rising nearly two percent as result of speculation about a cut in output by OPEC and allied producers next month to boost prices.
Nigeria has been finding it challenging balancing its books since 2014 when oil prices began a drastic fall. The new government of President Muhammadu Buhari since 2015 has been saddled with drastic dwindling revenues which contributed to the country’s first recession in 25 years.
Nigeria though currently out of recession has been faced with tepid growth; and high borrowing to fund government expenditure as result of insufficient government revenues. Most of the country’s revenues comes from the sale of hydro- carbons; and a fall in its prices would mean dire consequences for the citizens who are already grappling with lack of infrastructure in the country.
There have been moves to diversify the country’s main source of income from oil; and also increase the collection of local taxes but these efforts are yet to yield significant results.