U.S Lifting Sanctions On Iran Threatens Nigeria’s Precarious Economy …. Stakeholders Call For Production Cut-Back 

The lifting of sanctions on Iran by the United States of America (USA) may have dealt a blow on an already Nigeria’s precarious economy which is struggling to borrow to finance its deficit budget occasioned by very low crude oil prices in the international markets.
The income of the country have fallen by about 70 per cent as a result of crude oil price crash from a high of over $100 per barrel to about $30 per barrel.
The result has been a deficit budget that has been anchored on borrowing for implementation. The situation now looks more dire with the U.S lifting sanctions on Iran, after, it seemingly saw that it’s nuclear programme is no longer a threat to global peace.
The sanctions put in place in 2012 was lifted after Iran met the terms with six world powers to stop its allegedly weaponized nuclear programme.
The irony however is that, what is clearly Iran’s joy is Nigeria’s woe, which the current government will now learn to navigate.
“Today marks the start of a safer world,” said U.S. Secretary of State, John Kerry.
“We understand this marker alone will not wipe away all the concerns the world has rightly expressed about Iran’s policies in the region. But we also know there isn’t a challenge in the entire region that wouldn’t become much more complicated, much worse, if Iran had a nuclear weapon,” he added.
Iran has hailed the lifting of the sanction as a vindication of its power and influence in the world.
With the lifting of the sanctions, Iran, which has the fourth largest oil reserve in the world (160 billion barrels) is expected to flood the international oil market with more oil which could worsen the ongoing glut that has reduced the price of crude from $105 per barrel to about $30 per barrel. 
Also, the middle-eastern country recently announced that it is capable of producing oil at $1 per barrel; which means it can afford to sell its oil below the official international rate if it pleases.
The re-entry of Iran into the international oil trade could also see India, Nigeria’s top buyer of crude (India currently imports 750,000 barrels per day from Nigeria), look towards neighbouring Iran for its oil needs, further dipping Nigeria’s revenue stream. India buys about a third of Nigeria’s daily production while the U.S. currently buys none.
Last year, U.S. financial group, Goldman Sach, predicted that the present glut (without Iran’s supply) in the market could drive prices as low as $20 per barrel. This is an indication of a possible economic problem for Nigeria as the 2016 budget was benchmarked on $38 per barrel. This could possibly increase the budget deficit of $11 billion dollars.
A further drop in Nigeria’s oil export earnings is likely to drop the value of the naira below its present N305 to a dollar in the black market, a 43-year record.
Reacting to the development, former interior minister and chairman Integrated Oil And Gas Limited, Capt. Emmanuel Iheanacho in his reaction called on OPEC to call an emergency meeting and discuss on production cut back as a measure to stabilise oil price.
Iheanacho said with the lifting of the ban Iran will begin to trade on the international market and further saturate the market.
“OPEC should take stock of the situation and embark on cut back of production because with Iran pump more oil into the market will lead to more depression” he advised.
The former minister also advised government to consider rapid policy change to create stimulus in the economy.
“What I expect we should begin to do is to encourage local processing of the crude and feed the industries to boost local production and create job and at the same time export finished refined petroleum products” he suggested.
In his reaction, Chief Okey Okoye a chartered accountant and managing consultant of K-Point limited corroborated the position of Iheanacho.
Okoye said “we need to beging to add value to our crude by processing it locally. By-products from the crude oil can support our industries and I think it is time we begin to consider seriously diversification of the economy”.
He said the industrial sector and  mining can be resuscitated along side other ailing sectors as a way of boosting the economy.
In his reaction, Prince Edward Fatona, managing director of Niger Pacific said, “it is about time we really act on diversification from crude oil to agriculture and explore other mineral resources that abound in the country”.
According to him, oil prices have fallen by about 70 percent in the past 18 months as supply has outstripped demand. The demand for oil from China has fallen as its economic growth has slowed.
Meanwhile supply has increased, partly due to the rise of US shale oil. In addition, the world’s largest exporter of oil, Saudi Arabia, has refused to cut production – something it has done previously to support oil prices. 
Analysts estimate that about one million barrels of oil are being produced above demand every day.
Meanwhile they believe that Oil exporting nations that rely on a higher oil price to break even are suffering, such as Russia, Nigeria and Venezuela. 
Oil dived close to $30 per barrel last week on global oversupply, just as Nigeria called for an emergency meeting to address collapsing prices that has ravaged.

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