…Seeks further collaboration With EU
Adebayo Adelabu, Nigeria’s minister of power has decried the impact of the continuous drop in international price of crude oil, stating that most laudable infrastructure transformation projects in Nigeria will be affected as the nation still rely mostly on oil revenues.
According to BusinessDay’s check, international crude oil price stood at $64.76 per barrel on Sunday, which is a decline compared to $75 per barrel as the benchmark price for Nigeria’s 2025 budget.
Adelabu, who received the EU Ambassador to Nigeria, Gautier Mignot, in his office in Abuja at the weekend, appealed for increased financial support for various projects in the country, said that the decline in oil prices will lead to deficit, thereby impacting infrastructure transformation projects in the country.
He said, “We still require lots of financial support as the evolving economic landscape is not so favorable to us in this part of the world, I cannot lie to you. It’s not. Just let’s look at the recent disruptions of the reciprocal tariffs from the US and lot of other things that is coming.
“And look at the impact on the crude oil international price from $80 down to $64, and still going down further. That’s a lot of risk on our revenues in Africa, especially in Nigeria, where we rely so much on crude oil for foreign exchange. Over 90 percent of our foreign revenue is from crude oil. Non-oil export is still very, very low here.
” So you can see the disruptions is causing to even our 2025 annual budgets. “We have used $75 to the barrel as the benchmark price for the budget. We have used 2 million barrels per day. And we are still on 1.7million. You can see that gap, that hole is going to lead to deficit. The major impact is that a lot of our quite laudable infrastructure transformation projects will be affected.”
Adelabu called on continuous support from the western countries, stating that such support is necessary to derisk the nation’s investments environment, especially in the power sector.
He noted that a lot of the investors run away from investment to the power sector, whether it’s grid or renewable, but when they see huge investment coming in from the multilateral agencies, international development organizations, even the government itself, they are encouraged to come in.
He feared that the government may not have enough money for capital projects, after paying salaries, pensions, statutory reductions, and service debt. “In fact, service debt will be a problem. And nobody wants to be insolvent as a sovereign. financing is putting a lot of pressure on us. So, I want the Western world to continue to fund us in friendly conditions. Friendly terms that will enable us to want to pay back as soon as we are able to get out of this quagmire.
Mignot in his remarks, expressed the desire of the EU to continue to work and collaborate Nigeria, especially in the power sector, adding that the energy transition aspect is very important.
The envoy also noted the improvements made by Nigerian government in the oil and gas sector. “And as you know, we work with grants, work with loans through the EIB in particular. We have also now the new important financial stakeholder arriving, which is the European Bank for Reconstruction and Development, the EBRD. And you know that they are extending their mandate to six sub-Saharan African countries, including Nigeria. And Nigeria is becoming a shareholder of the EBRD. Because it’s not only a EU bank.
“We have the majority of member states but there are many other stakeholders and beneficiary countries are shareholders. So it will also be a new source of financing. They will have an office in Lagos and they are more focused towards private sector than EIB. So it’s a new asset,” he said.
SOURCE: Businessday