July 14, 2020

Nigeria Economic Update (Issue 25)

According to the CBN, crude oil price has risen to $42.94per barrel, a 33 percent rise compared to $32.25 per barrel in the previous month.[i] The rise comes just as many economies are reopening, recording a marginal increase in demand. However, world oil demand is still expected to drop by 9.1 million barrels per dollar.[ii]  OPEC and its member countries have agreed to drop oil production in order to control market supply and consequently price. With this agreement, the revenue gains from increasing oil price for Nigeria could be marginal as the country is expected to cut production by about 22 percent to 1.4 million barrels per day which may also hinder the realization of the revised 2020 budget considering that the crude oil production estimate is 1.7 million barrels per day. To ensure performance of the 2020 budget, concerted efforts must be in place to ensure optimum collection of non-oil revenues by blocking leakages and non-remittances through improved administrative and monitoring mechanisms.

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Nigeria Economic Update (Issue 21)

Nigerias domestic crude production increased significantly in April 2017. OPECs Month-on-Month data shows a 22.6 percent increase to 1.5 million barrels per day constituting the biggest increase among oil producing group. Crude production increased at the backdrop of completion of scheduled maintenance/repairs at the Bonga oil field, implying resumption of crude production by an additional 225,000 barrels. Remarkably, Nigeria is progressively moving towards meeting daily output benchmark/target (2.2 million barrels per day). Given recent boost in domestic crude oil production, considerable effort should be made to improve the countrys refining capacity in order to reduce fuel importation and conserve foreign exchange.

Nigeria Economic Update(Issue 31)

Recent data on Consumer Price Index (CPI) indicates significant increase in general price level for the sixth consecutive month. Headline inflation increased by 0.9 percentage points from 15.6 per cent recorded in May to 16.5 percent in June the highest rate recorded since October 2005 (an 11-year high). The core sub-index increased from 15.1 percent to 16.2 percent while the food sub-index stood at 15.3 percent, an increase of 0.4 percent from the preceding month of May. Higher prices of domestic/imported food and other items, as well as increased energy cost were major drivers of the increase. This is probably explained by the exchange-rate pass-through, given the significant depreciation of the naira.