THE GLOBAL OIL PRICE AND THE NEW NORMAL (COVID 19)

IMPLICATIONS ON THE NIGERIAN ECONOMY

Abstract

The saying that when the price of oil sneezes, the Nigerian economy catches cold is true of this new normal, the Covid 19 pandemic which has seriously affected world oil price to the detriment of growing economies like Nigeria. This study examines the impact of the global oil prices on Nigeria’s economy with reference to the COVID-19 pandemic. This study utilizes the documentary method which entails gathering data from secondary sources like newspapers, journals, the internet, textbook, and so on. The findings of the study show that COVID-19 has impacted negatively on the global oil prices, Naira/USD exchange rate, Nigeria’s all-share index, inflation, and growth rate. The impacts it is projected will worsen the durability of the pandemic. The country’s budget estimate has also been negatively affected, given the large changes between the budget assumptions and stance during the COVID-19 pandemic. Consequently, more than 50% of the country’s budget underlined by a deficit of about 138 % would have to be funded by external borrowing, thereby further increasing the debt burden of the country. Economic growth in the first quarter was positive. Although the probability of immediate negative growth is slim, the long-term outlook is bleak. However, the study recommends that, given the inevitable slide into recession, necessary actions need to be taken to facilitate recovery. Provision of infrastructure that will encourage diversification of the economy from oil dependence cannot be overemphasized and should be pursued vigorously, with a focus on the major contributing sectors to moderate variability in the real GDP growth rate