A senior analyst at Financial Derivatives Company, Oluwatomi Mayowa, has projected a decline in demand for Nigeria’s natural gas, which will subsequently reduce the amount of foreign exchange earned through exports.
This projection is as a result of the fall in global natural gas prices by over 50% in January, while, noting that natural gas accounts for 14% of Nigeria’s exports worth $10 billion.
She made this projection on Thursday in an interview on Channels Television.
Many European countries have stored enough natural gas for the winter, although, the Winter didn’t turn out as cold as forecasted. The result of this, lower demand for natural gas in Europe.
A ripple effect of this, knowing that Europe is a major importer of Nigeria’s natural gas, may be a lack of financing of the federal government’s 2023 budget as a result of lower revenues.
There could also be more forex restrictions and rationing, forcing many people to access dollars at the parallel markets.
As a form of cushion, Mayowa recommended more investments in the Liquefied Petroleum Gas sector, including the construction of a better supply system to ensure that Nigeria can become self-sufficient in the sector.