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.
July 14, 2020
Nigeria Economic Update (Issue 25)
Related
Nigeria Economic Update (Issue 16)
Recently
released World Economic Outlook by the International Monetary Fund (IMF)
projects economic activities to increase significantly in developing countries-
especially Nigeria. Annual real output is expected to grow by 0.8 percent in
2017 from the contraction of 1.5 percent in 20161. Improvement in
economic activities is hinged on prospective favorable effects of continued
increase in commodity export price (Crude oil is expected to increase to $55
per barrel in 2017 compared to $46 in 2016).