LAGOS  MAY 6^TH (NEWSRANGERS)-Nigeria’s economy is expected to contract by 3.4% this year, government officials said on Tuesday (May 5) as dwindling oil revenues coupled with a world under lockdown forced the country to assume a lower petroleum price of $20-a-barrel.

That’s bad news for a sector that, over the past decade, has seen unprecedented growth in local capacity.

In 2010, Nigeria enacted legislation to boost the number of locally-owned and managed companies in the multi-billion dollar industry, overseen by the Nigerian Content Development and Monitoring Board, or NCDMB.

Amy Jadesimi, managing director of the Lagos Deep Offshore Logistics Base, says the act was “instrumental” in shifting the market to a place where so-called local content was compulsory.

“It also allowed private sector players such as Ladol and the NCDMB – the board – to put in place long-term plans so that we could see over the first ten years, which we are now reaching, a transformation of the capacity of the market.”

But the economic headwinds now threaten such changes.

Africa’s top oil exporter relies on crude oil sales for around 90% of foreign exchange earnings and more than half of government revenue.

But on Tuesday Finance Minister Zainab Ahmed said Nigeria would be cutting its budget by around 15% and that major oil and gas projects would be delivered “much later than originally planned”.

Reuters