Oil Price Collapse Could Strain Nigeria’s Federal System
- Most states depend on crude payouts from national government
- Some states at risk of insolvency, Chatham House analyst says
This article is for subscribers only.
The collapse in international oil prices, having dealt a devastating blow to Nigeria’s finances, now threatens the West African nation’s shaky federal political system.
Earnings from crude sales will plunge 80% to 1.1 trillion naira ($2.84 billion) this year, the nation’s budget office said last month. A protracted loss of income could leave most of Nigeria’s 36 states unable to function. It would also aggravate long-simmering tensions in the oil-rich Niger River delta for local control of natural resources.