Macroeconomic Report & Economic Updates
December 1, 2016
Nigeria Economic Update (Issue 50)
Crude oil price experienced
a mixed week from November 18 to November 25, 2016. Specifically, OPEC basket
price and Brent crude price fluctuated, to a daily average of $44.6 (from
$42.33)and $48.3 (from $46.86)per barrel
respectively. The present oil volatility is as a result of sell-offs,
attributable to speculations/fears of an insufficient production cut by OPEC (in
its bid to control oversupply) – a deal scheduled for its next meeting on
November 30th 2016. This speculations have arisen due to
the reluctance of major OPEC member country (Saudi Arabia) to participate in the
potential oil cut dealwhich could exert a downward pressure on oil
prices. However, oil prices should rise if OPEC members agree to the oil cut
deal. Irrespective of the outcome of the meeting, Nigeria is exempted from the
potential crude oil cut. Thus, it will be optimal for the government to act
quickly to address the insurgence in the Niger Delta region, in order to raise domestic oil production as much as
possible.
Related
Nigeria Economic Update (Issue 33)
Available
reports from the Nigerian National Petroleum Corporation(NNPC), suggests a
significant reduction in the cost incurred to produce one barrel of crude oil for
the past two years. Specifically, the cost of production reduced by 71 percent
from $78 as at August 2015, to $23 per barrel as at August 2017.
This may be attributable to moderations in operational expenditures, following
repairs and restructuring in the oil region.
Nigeria Economic Update (Issue 1)
Nigerias external reserves improved in 2017. The reserve stood at approximately $39 billion as at the end of December 2017, up by about 50 percent from the $26 billion at the beginning of the year 20172. The surge in reserve was particularly boosted by increased capital importation, and crude revenue earnings prompted by a relatively higher crude oil price and improved domestic production. Given that the recent uptick in external reserves is still largely associated with improved crude oil price, efforts should be geared towards conserving current reserve gain so as to cushion future external shock. In the medium term, there is need to diversify export earning away from oil so as to mitigate the effects of volatility in crude oil prices.
Nigerias Budget For 2012: Inclusive Growth And Job Creation
This brief examines Budget 2012 and highlights key structural and institutional
challenges that have been militating against the achievement of inclusive growth
and employment generation as listed in the budget.