COVID-19 Pandemic: The Impacts of Crude Oil Price Shock on Nigeria’s Economy, Legal and Policy Options

Abstract

The outbreak of the COVID-19 disease has gravely shaken the world economy. The economies of many countries have come under severe strain; Nigeria’s petroleum industry has been particularly affected. This has threatened the countries’ budgets and other essential needs involved in citizens’ welfare. The government is taking drastic measures to combat this scourge, with few results. This study adopts a doctrinal legal research approach and considers both the primary and secondary sources of law, such as judicial precedents, international conventions, and peer-reviewed journals. Legal theories were also applied as an academic lens for modelling the research. The justification for using the method was to establish the trustworthiness of the findings on the impacts of crude oil price shock on Nigeria’s economy, its legal and policy options. This study investigates the influences of oil price shock on the country’s economy and the legal remedies required to build economic resilience to mitigate future contingencies. The study argues that the provisions of the extant laws can be utilised as a preventive mechanism for tackling the impacts of oil price shock on Nigeria’s economy. The study recommends other remedial measures, such as diversification from oil and gas to non-oil sectors. The study designed a hybrid model for mitigating the influences of crude oil prices on the country’s extractive wealth. The study advocates for the need for an effective legal regime to shield the domestic economy from international oil price instability. The implications of the main results are that crude oil production and prices play a significant role in real growth enhancement. However, they exert a negative but unsustainable standard innovation on growth, which could be mitigated through appropriate legal and policy options. Nigeria needs stringent, transparent, and the best petroleum management practice laws to manage its petroleum sector’s revenues for sustainability.