Yesterday, it was reported that Exxon Mobil Nigeria’s Qua Iboe terminal was blocked by intruders who stopped staff from accessing the facility. This is the latest in a slew of attacks on oil infrastructure in Nigeria. On the 5th of May 2016, the Chevron Valve Platform located on the high sea, near Escravos in Warri, Delta State was attacked by people who identify as Niger Delta militants.

According to reports, militant activities in the Niger Delta have caused the loss of about 500,000 barrels per day of crude oil production from companies in Nigeria, pushing oil output in the nation to the lowest in over 22 years.

This is happening at a time when the country is going through an economic downturn, poor foreign exchange rates and insecurity. Nigeria is one of the countries that have been severely affected by the fall in global oil prices as 75 percent of its revenue is generated through oil exports. In an attempt curb the effects of this, the country put stringent policies in place to save the country but these policies have yielded little to no result.

This would have an adverse effect on the country as foreign investors’ confidence in the country would be very low and could also affect the following:

Level of unemployment in Nigeria
The rate of unemployment in the country, which stands at around 10.4 percent, would increase further as international companies may be forced to close down operations in the country. The International Oil Companies (IOC) for instance would be forced to cut jobs in order to reduce their expenditure in the country.

Nigeria’s budget
If the revenue generated from oil falls further as a result of these attacks, the country would have to increase the amount needed to fund its budget. This is because the fall in oil prices as well as a fall in oil production will also affect the nation’s revenue. In order to fund the budget, Nigeria would be forced to go to the capital market to issue bonds and borrow more money hence, increasing domestic debt.

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