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Nigeria says Obama Energy Plan Threatens Economy

The governor of Nigeria's central bank, Chukwuma Soludo, says U.S. President Barack Obama's plan to reduce dependency on oil imports is a threat to the Nigerian economy. Nigeria is Africa's largest crude producer and the fifth biggest source of U.S. oil imports.

Soludo says Nigeria's economic future could be in danger because of Mr. Obama's plan to cut U.S. oil imports.

Soludo told a parliamentary committee that with the Obama administration preparing to invest heavily in alternative energy sources, there is a permanent threat to oil as the mainstay of the Nigerian economy.

Mr. Obama proposes to reduce overall U.S. oil consumption by at least 35 percent, or 10 million barrels of oil per day, by 2030 in order to offset imports from OPEC nations.

For Nigeria's 140 million people, a fifth of Africa's population, hydrocarbons are more important then ever. Crude exports account for more than 90 percent of foreign exchange earnings.

Production currently ranges between 1.6 million to 1.8 million barrels per day, compared with 2.6 million barrels a few years ago, with continuous violence in the nation's Delta region having taken a toll on output.

"This year marks the beginning of our second full year in office and the midpoint of this administration. It also coincides with a time of profound economic worries in the world. The world's leading economies are in a grip of recession and the fear of a global contagion is real. Already, we can feel the impact from falling oil prices, the declining exchange rate of the naira and the cascading prices of shares at the capital market," said Nigeria's President Umaru Yar'Adua at a recent cabinet meeting.

The local currency has dropped by more than 20 percent against the U.S. dollar since early December and foreign exchange reserves have been falling.