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 43)

Crude oil prices have sustained upward increases for the past few weeks in October. While upward trajectory of crude oil prices is expected to be sustained in the short term in line with OPECs production cuts deal expected to run until March 2018, it is important to note that crude oil prices would remain volatile. The Nigerian government therefore should take advantage of periods of high revenue from crude oil exports to develop other sectors (such as Agriculture, Manufacturing and Services sectors) of the economy as key exporting and revenue generation sectors, and thus minimize volatility risks