Latest data from the CBN shows that Nigeria’s external reserves fell significantly in August 2018. As at the end of July, the reserve stood at $47.11 billion; it dropped to $45.83 billion by August 23– losing as much as $1.23 billion in the month. The CBN’s continuous intervention along with affected foreign investment premised around political uncertainties, may have triggered the decline in reserves. Policy actions that relay a message of future political stability and conducive business environment amid politicking for 2019 elections is critical to sustaining short-medium term investment flows.
Macroeconomic Report & Economic Updates
Recently released report by the National Bureau of Statistics indicates decline in output and contribution to GDP in the Nigeria aviation sub-sector. In real terms, output in the sub-sector decreased annually by 4.9 percent between 2015 and 2016; and declined by 13.3 percent (Year-on-Year) in 2016Q4 the largest quarterly decline in 2016. The sectoral fall in output was supply-side driven: increased cost of operations prompted cut-back on services provided by the sector as well as termination of some aviation operations. Going forward, recent improvement in forex supply in the interbank and BDC channel would enhance forex access to airline operators and facilitate smooth running of the airline industry.
Recent media highlights suggest that there is a prospective decrease in Nigerias budgetary benchmark crude oil production. Precisely, the 1.8 million barrels per day proposed at the Joint OPEC and Non-OPEC Ministerial Monitoring Committee (JMMC) meeting, is 18.2 percent lower than the budgetary production benchmark of 2.2 million barrels per day. This followed OPECs recent review to include Nigeria in the ongoing production cut agreement amid concerns of global oil market oversupply, given the constant production increase from Nigeria over the last few months.
The paper presents an elaborate econometric analysis of a number of key macroeconomic indicators to oil revenue and examines the results of oil revenue fluctuations.
Crude Oil Price: Crude oil price attained a historical low of $30.7 in January 2016 largely due to excess global oil supply. Crude Oil Production and Export: Oil production has continued to fall in