Nigeria's oil industry already in the spotlight over the last few years owing to incessant militant attacks and crime, narrowly escaped the fallout from a clumsy bureaucratic blunder that would have delayed the delivery of a total 6 million barrels of crude to the international markets.
Local reports said state-owned Nigerian National Petroleum Corporation's plans to export six tankers of 1 million barrels of crude on Wednesday from various terminals across the country may have been jettisoned after the oil regulatory agency failed to get an export permit from the ministry of commerce in time.
The late night clearance by the ministry saved the government $328 million in revenue based on current oil prices and saved the NNPC penalites for not being able to supply their customers of up to $50,000/day.
Nigeria's dependence on oil for over 90% of its foreign exchange earnings makes its capital account vulnerable to the fluctuations in crude oil prices and can ill-afford a blunder especially in recessionary times.
Though no country can be completely insulated from the global economic crisis, its implications may be very serious on oil-dependent economies like Nigeria.
The financial crisis has already wreaked havoc with the government's planned public spending commitments and the local currency, the naira, has lost about more than 30 percent of its value against the U.S. dollar in recent months.
Oil production averaged just 1.6 million b/d so far this year compared with the government projected output of 2.29 million b/d for 2009.
Its monthly oil revenue has dropped to $1.5 billion this year compared with $2.27 billion last year due to the crash in global oil prices.
To have an economy based so singularly on one thing, a lucrative raw material, it seems like Nigeria should have been in a better position to weather the storm.
But the global meltdown has highlighted its failure to save oil income for a rainy day during the good boom oil days. It also exposes the regulators mistake to rely merely on the higher oil earnings.
By world standard Nigeria has the second lowest per capita oil revenue amongst OPEC members besides Indonesia and is listed amongst the poorest developing countries in the world despite its remarkable oil revenue.
Nigeria has the reputation of being the country that has least prudently managed its oil wealth.
Oil is a wasting asset and could be exhausted some day, this poses a very big challenge to reserves management in Nigeria as to what would become of the economy when this prominent resources is fully depleted.
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