Abuja — The United Nations Conference on Trade and Development (UNCTAD) yesterday confirmed that Nigeria's downstream oil sector had receded in the last 20 years, especially in refining utilisation.
In a report entitled "Commodity Dependence: A Twenty-Year Perspective" and released in Abuja, the UN agency insisted that while refining capacity changed a little in the country, the utilisation rate fell from 34.5 per cent in 1998 to 18.3 per cent in 2017.
The document, which downplayed the nation's economic diversification efforts, showed that two thirds of developing countries are dependent on commodities with Sub-Saharan Africa being the hardest-hit, as 89 per cent of nations in the region depend on products.
While Nigeria's refineries kept performing poorly, leading to perennial losses in the region of N551.46 billion from January 2015 to December 2018, the global body noted that other oil-producing countries leaped in terms of exports of petroleum products thus saving themselves of the shocks of volatility and economic slowdown.
According to the report, in Azerbaijan, Egypt, Kuwait, Nigeria and the Bolivarian Republic of Venezuela, production of petroleum derivatives dipped while in others such as Gabon, it altered slightly within the period under review.
The lack of growth in production of derivatives in the affected nations, the document further noted, was due to stagnation or a reduction in installed refining capacity, low refinery capacity utilisation, or both.
Though it indicated that the number of countries that are product-centric peaked in the two decades, the survey, however, pointed out that some countries succeeded in diversifying their production and exports within the period.
UNCTAD nevertheless defined a country as dependent on commodities when products account for more than 60 per cent of its total merchandise exports in value terms.
According to the organisation, commodity-dependent nations increased from 92 between 1998 and 2002 to 102 in the period covering 2013 and 2017.
More than half of the world's countries (102 of 189) and two thirds of developing entities are dependent on commodities, the report added.
UNCTAD's Secretary-General, Mukhisa Kituyi, observed: "Given that commodity dependence often negatively impacts a country's economic development, it is important and urgent to reduce it to make faster progress towards meeting the sustainable development goals."
Read the original article on Guardian.
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