Q: How will Nigeria be impacted by the volatility in the Middle East and north Africa and the rise in oil prices?
A: There are a number of dimensions to the oil price increases as far as we are concerned. One of the sad things is that we do have fundamental structural problems where we are an oil-producing nation but we import a lot of our energy. So some of the benefits that we get from higher crude prices are eroded by the higher cost of imported petroleum products. That translates into a much heavier burden on the government because the government subsidises refined petroleum products and that increases the fiscal deficit. Rising oil prices are good for our [foreign exchange] reserves, they are good for our export earnings – but they are not good for the government deficit until we get our refineries up and running and stop importing petroleum products. By and large, the benefits outweigh the costs as oil revenues account for 80% of the government budget.
