Oil price shocks are nothing new, and the consequences for an exporter of Nigeria’s standing cannot be overstated. However, a lot is misunderstood and I want to focus on one of such. Every time Nigeria experiences a crude oil related (price or production) macroeconomic shock, there is always a consensus about the need for diversification.

1. 0
2000
4000
6000
8000
10000
12000
14000
0
20
40
60
80
100
120
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
REVENUEANDEXPENDITURE(Bn$)
OILPRICE($/BARREL)
Price in Contemporary Dollars OPEC Basket Price
Government Revenue Government Expenditure