Latest update February 24th, 2025 9:02 AM
After six decades of production, politicians have oil rich Nigeria drowning in US$108B debt
– Now seeking US$11B more for survival
By Kiana Wilburg
Kaieteur News – After more than six decades producing oil, Nigeria, thanks to the decisions of its politicians, is drowning in US$108B of debt.
But in order to survive the dreaded COVID-19 pandemic, Africa’s biggest oil producer needs US$11B in fresh loans from financial institutions such as the International Monetary Fund and the World Bank to purchase basic medical and food supplies.
Kaieteur News recently reported that some financial institutions are hesitant to provide the African nation of more than 200 million people with more loans due to rampant corruption by politicians. Be that as it may, the Natural Resource Governance Institute (NRGI) which is closely following the crisis in Nigeria, opined in one of its analytical pieces that oil-rich countries such as Nigeria have clearly found themselves stuck between the “rock” of economic ruin and the “hot place” of environmental catastrophe.
But NRGI, one of the world’s leading non-profit organisations in improving countries’ governance over their natural resources, firmly believes that all is not lost for Nigeria. It posits that the future of Nigeria lies in weaning itself off of fossil fuels and preparing its economy for the energy transition that is taking place the world over.
The Institute was keen to note that some countries which are rich in oil are already headed in the wrong direction. In this regard, it noted that politicians in some countries are intent on proving that their country can become a world-class profit making machine, just as international oil companies did in the 20th century. It warned however, such lofty dreams come at a price.
NRGI said, “The difficulty of navigating transition is hardly exclusive to Nigeria… From Mexico to Mongolia, from Ghana to Guyana, governments must address the unknown future of energy markets. As the world recovers from the pandemic and continues to transition toward renewable energy, city skies may remain relatively clear. But how resource-producing countries manage the decline in fossil fuels is critical, especially after the shock of the economic and health crisis.”
2021 GOVERNANCE INDEX
In its 2021 Resource Governance Index Report, NRGI was keen to note that Nigeria’s governance of its critical oil and gas sector has been concerning, with cases of corruption, fiscal mismanagement, and environmental degradation all reported in the six decades since production began.
Even prior to the Coronavirus pandemic and the 2020 oil price shock, the sector was stuck in a cycle of high uncertainty, boom-and-bust spending and diminishing returns, the transparency body stated.
It concluded, “Production has mostly stagnated, foreign direct investment has declined, and oil revenues have come up short of what has been budgeted. Overall, Nigeria’s oil and gas governance is weak and falling short in key measures of transparency and accountability.”
Nigeria: Oil rich but plagued by extreme poverty
• Oil-rich Nigeria has some of the most crushing poverty rates in the word. In fact, 120 million out of its 200 million population live under US$1 per day.
• Other statistics note that 75% of the youth population (below the age of 25) is unemployed.
• Despite having the 27th largest economy in the world according to 2020 statistics, 20% of the children in Nigeria do not live till their fifth birthday due to the lack of basic facilities.
• Another heart wrenching reality is that the mistakes made with this country’s oil and gas resources, have resulted in more than 57 million Nigerians lacking safe water, over 130 million lacking adequate sanitation, and more than 10 million children out of school.
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