Macroeconomic Report & Economic Updates

The World Bank's Global Development Prospect report for June 2023 has maintained Nigeria's projected growth rate 2023 at 2.8 percent. According to the report, this growth will primarily be driven by the non-oil sector as the oil sector grapples with structural challenges, resulting in output levels below the assigned quota by OPEC. Foreign exchange shortages, exchange rate volatility, security challenges, rising living costs, and limited fiscal capacity are anticipated to impede growth.

In its first administrative steps, the new government of the federation has declared the removal of the country’s controversial subsidy on fuel. Welfare advocates have defended it, but it has also come under heavy fire for its macroeconomic and budgetary lapses. For instance, subsidy costs, which totalled over N10 trillion between 2006 and 2019, consumed N4.39 trillion ($9.7 billion) in 2022 alone and nearly N3.36 trillion ($7.5 billion) in the first half of 2023, have been a contributing factor in budget deficits in recent years.

The Nigerian economy grew by 2.31 percent in the first quarter of 2023, according to a report by the National Bureau of Statistics (NBS) released in May 2023. However, compared to the fourth quarter's GDP growth, which was 3.52 percent, this represents a fall of 1.21 percentage points. Compared to the first quarter's economic growth of 3.11 percent the year before, GDP growth decreased by 0.80 percentage points annually.

Nigeria produced a total of 999,000 barrels per day (bpd) in the month of April 2023, according to the latest monthly oil market report of the Organization of Petroleum Exporting Countries (OPEC). This output, however, indicates a decline of 270,000bpd from the 1.27 million bpd produced in the month of March; it also represents the third successive decline in monthly oil production since February 2023 and the fourth production slump in the five months leading from December 2022. Consequently, Nigeria has once again lost its place as Africa’s highest crude oil producer, falling behind Angola, which produced a total of 1.06 million bpd in the period under review after improving by 91,000bpd from 972,000bpd in March 2023.

The monthly report by the Organisation of Petroleum Exporting Countries (OPEC) on the global movement in oil prices revealed that crude oil prices increased in April 2023. Specifically, the OPEC Reference Basket (ORB) increased, on average, from $78.45/Barrel in March 2023 to $84.13/Barrel in April 2023. This represents an increase of about 7.2 percent.