Macroeconomic Report & Economic Updates

Nigeria Economic Update (Issue 46)

Estimates from the Organization of Petroleum Exporting Countries (OPEC) show that Nigeria produced about 1.25 million barrels per day (mbpd) in October 2021. This is below the budgeted crude oil production level of 1.86 mbpd in the 2021 budget. Furthermore, crude oil production recorded a decrease of 9% year on year from 1.3 million in October 2020 to 1.2 mbpd in October 20211.Similarly, on a month-on-month basis, Nigeria’s total oil production decreased slightly from 1.25 mbpd, decreasing by about 200,000 bpd. The decrease in output is primarily due to vandalism and bunkering in oil-producing regions, which causes damage to oil installations. As oil production level falls, government revenue falls, thereby shrinking the fiscal space and leaving the government with the option of borrowing to invest in vital sectors of the economy. Further, the fall in oil output level puts pressure on the value of the naira, as crude oil remains Nigeria’s primary export. To actualise the revenue projection from the oil sector, the government in collaboration with security agencies should strengthen relations with host communities in securing oil installations. The government can also leverage on technology by utilising satellite with geo information system to effectively monitor pipelines

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