Nigeria’s inability to meet the Organization of Petroleum Producing Countries, OPEC’s quota of 1.7 million raises serious economic concerns.
The Nigerian National Petroleum Company NNPC Ltd, reported that Nigeria produces less than 1.5million bpd of the crude oil quota.
This shortfall has resorted to borrowing to complement budget deficits, since oil is still the mainstay of the economy.
The government is also faced with the additional problems of sustaining subsidy payments and massive oil theft currently ravaging the country.
Amidst dwindling revenue resources, oil is still Nigeria’s economic mainstay, but it has been poorly managed, and this is evident in Nigeria’s refineries posting perennial losses.
In its bi-annual report, the World Bank expressed concerns on this development, stating, “Risk remains high on increasing fuel subsidies, which could weigh heavily on public finance and pose debt sustainability concerns.”
Furthermore, as Nigeria continued to rely on oil as the mainstay of its economy, oil-related revenues would contribute 40 to 60 per cent of fiscal revenue, while oil and gas would account for 80 to 90 per cent of total exports.
The World Bank further stipulated that weak oil production was holding back Nigeria’s overall recovery process in 2022.