The Organization of Oil Exporting Countries (OPEC) has declared that Nigeria’s oil production increased by 25,000 barrels per day (bpd) in June 2024, bringing the total output to 1.276 million bpd. This follows an earlier decrease in May 2024, when oil production fell by 30,000 bpd to 1.251 million bpd.
But in spite of the gains, Nigeria’s oil production remains below OPEC’s 2024 quota of 1.38 million bpd and the Federal Government’s budget benchmark of 1.78 million bpd for the year.
In its monthly report, the Centre for the Study of the Economies of Africa (CSEA) expressed concern that this suggests that Nigeria is still not producing enough oil to meet its budgetary expectations, adding that crude oil theft, oil bunkering, illegal refining and operational disruptions continue to hinder the country’s full production potential.
It stressed that the government must implement strict measures against oil bunkering and production disruptions to address these challenges and enhance production sustainability.
Additionally, the government should encourage private participation in the oil sector, especially in oil infrastructure, to increase the refining capacity in the country and ensure transparency and efficiency in the sector.
Efforts to increase oil production will bolster government fiscal space, which in turn, will enable the government to invest in infrastructure that would unlock new industries, thereby, reducing future dependence on oil for revenue and exchange earnings.
Meanwhile, the Federal Government says Nigeria’s oil revenue grew from 11 percent in the first half of 2023 to 30 percent in the first half of 2024.
Minister of Finance and Coordinating Minister of the Economy, Wale Edun, stated this in Abuja recently, saying the growth in government revenue was due to the reconfiguration and improvement in government finances.
“The government’s determination to mobilize non-oil revenue has consistently delivered impressive results. For the half-year 2024, non-oil revenue surpassed the revenue in the first half of 2023 by 30 per cent above the 2024 budget target without any increases in taxes,” he said.
On debt, Edun said President Bola Tinubu’s administration has been working to manage and reduce the national debt to create better fiscal headroom for economic management.
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“In dollar terms, Nigeria’s debt burden has reduced and the government’s fiscal deficit has improved. Our debt has fallen in dollar terms from 108 billion to 91 billion dollars. Additionally, the government has diligently serviced all its loans and obligations with no recourse to ways and means of financing, ‘’ Edun said.
Edun noted that in 2023, the administration exited the Ways and Means debt trap due to better management of the fiscal space, adding that the Federal Government did not rely on borrowing from the CBN’s Ways and Means to fund its obligations.
The minister pointed out that part of the inflationary pressure the country is currently experiencing is as a result of the past abuse of the apex bank’s Ways and Means.
He said the Federal Government had repaid the previous N7.3 trillion obligations within a year of Tinubu’s administration.
On Debt Service to Revenue, the minister said the Federal Government for decades, had been spending more than half of its revenue on debt servicing insisting that this was done to enable it to meet its debt obligations to avert any form of default.
