Should Nigeria pull out of OPEC and why? Learn the major reason.
Organisation of Oil Producing Countries (OPEC) has some advantages to offer to Nigeria, but it also has certain cons to deal with. So what are the reasons for the country to pull out of OPEC?
Negative impacts of OPEC membership for Nigeria
Since 1985 the strategy has been to devalue naira to get more output from the export of oil in Nigeria. This policy has been followed to the letter, and presently the country deals with over 16 percent of inflation. People suffer from it bitterly, and the level of dissatisfaction grows.
And the cost of import also increases rapidly, as Naira falls against the dollar. However, the benefits offered by OPEC come down to nothing due to the limitations set by this organization.
While Nigeria could have increased the production of oil, it has a limit set for it and cannot break it. The only way to benefit from the devaluation strategy would be to boost the output of oil production and start selling more of it. That’s the primary reason for the country to pull out of OPEC and to set its own production strategy.