Nigeria Beats Economic Growth Estimates as Oil Exits Contraction 

Nigeria’s economy grew 2.54% quarter-on-quarter, ending 2023 with a 3.46% expansion in gross domestic product as the oil sector ended three years straight of contraction, according to the country’s National Bureau of Statistics. 

Source: Nigeria National Board of Statistics

The economic growth expansion beat Bloomberg estimates of 2.4%. 

According to the Nigerian government, the country’s oil sector expanded 12.1%, with production rising to 1.55 million barrels per day, up from 1.34 million bpd in the previous year.  Rising production could mean that Nigeria will meet its OPEC production quotas–an achievement Nigeria authorities are hoping to realize by the end of this year. 

Due to high levels of theft, pipeline vandalism and lack of investment in capacity, Nigeria has been the biggest laggard in terms of OPEC+ crude oil production, consistently failing to reach its quota. Major oil companies have been driven out of the country. 

International oil companies have been forced frequently to declare force majeure on exports from Nigeria’s biggest oil export terminals Forcados and Bonny Light, due to pipeline ruptures and spills.

Last month, Nigeria said it was targeting 2.6 million bpd by 2026, which would be a significant jump from 2023’s production of around 1.6 million bpd, Reuters reported. 

Last November, Nigeria closed out Q3 with flat economic growth as oil prices stabilized and the impact of the new government’s reforms started to take shape. In Q3, the economy expanded 2.54% as well; however, that figure was still far below the 6% expansion that the country’s new president–Bola Tinubu–had promised during his inauguration in May 2023. . 

Among other reforms, President Tinubu canceled a petrol subsidy and lifted currency controls, though this also fueled inflation and resulted in a public backlash.

By Charles Kennedy for Oilprice.com

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