Oil and gas companies listed on Nigerian Stock Exchange reported a loss of about N178.018bn in the first half of 2020 as coronavirus pandemic continued to take a toll on the industry.

An analysis by our correspondent revealed that the oil and gas sector lost N178.02bn or 30.97 per cent to close at N396.67bn in market capitalisation on June 30, compared to N574.69bn at the beginning of trading on January 2.

The sector recorded a loss of N102.41bn or 17.82 per cent during the first quarter to close at N472.28bn in market capitalisation on March 31, as against N574.69bn on January 2.

The sector recorded a loss of N75.613bn in second quarter to close at N396.670bn in market capitalisation on June 30, as against N472.28bn on April 1.

A senior research analyst at FXTM, Mr Lukman Otunuga, said the dramatic consequences of the Covid-19 outbreak threatened an otherwise resilient outlook for Nigeria’s economy, as GDP results for the fourth quarter of 2019 showed an expansion of 2.55 per cent.

The growth was the highest seen since 2015 and above the International Monetary Fund’s 2.1 per cent forecast.

According to Otunuga, the economy is supported by Central Bank of Nigeria’s policies to boost credit growth, such as hiking the loan-to-deposit ratio and other monetary policy tools.

He said, “Like many other economies at the time of writing, Nigeria is vulnerable to the spread of the Covid-19 in economic and health terms because one of its main trading partners is the epidemic’s epicentre, China.

“For the time being, the sizable manufacturing sector in China has been slowed by large-scale workforce disruptions and it is expected that GDP growth for the quarter will be pressured amid a fall in business confidence.

“While it is too early to tell the precise extent of the slowdown, the impact on the supply chain and trading with China’s trading partners is already evident. Nigeria’s crude oil exports to China fell in February amid weaker oil prices as the outlook for global oil demand weakens.”

Otunuga noted that since the outbreak of the virus, oil prices had slipped over 15 per cent amid demand-side concerns, the United States dollar had appreciated against G10 and emerging market currencies against a background of risk aversion, and gold had jumped to fresh seven-year highs.

He said, “If it continues to spread, the virus outbreak and subsequent slump in demand from China present major risks to the Nigerian economy.

“Crude oil revenues account for less than 10 percent of GDP but remain the biggest source of foreign exchange for the nation – 90 per cent of export sales over 50 per cent of government revenues

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