The Political Economy of Oil and Coronavirus Disease in Nigeria: Imperatives for Diversification

Abstract

Nigeria runs a mono-petrodollar economy, and the government has persistently ignored the calls for diversification except for when the price of oil plummets. Indeed, there has not been a tangible effort to sincerely shift the focus from being perpetually oil-dependent to developing the non-oil sectors of the economy and increase foreign exchange earnings. However, the outbreak of the Coronavirus pandemic revealed the volatility of the Nigerian economy and its susceptibility to oil shock and natural disasters. Situated within the context of the Cobweb Theorem, this paper explores how oil dependence has exposed the Nigerian economy to oil price fluctuation and the threat of an impending recession. The paper which relied on secondary data also examines the imperativeness of diversification as a way forward in Nigeria and concludes that the government must take advantage of her abundant resources and pay critical attention to other sectors of the economy such as agriculture.