Nigeria’s economy recorded flat growth in the third quarter, as oil prices somewhat stabilized while the impact of reforms by the newly created government at boosting output were yet to have an impact.
The economy expanded by 2.54% in Q3 2023, a slight improvement from 2.51% posted in the second quarter but way below the 6% clip that President Bola Tinubu pledged during his inauguration in May.
The oil and gas sector contracted 0.85% in the third quarter, a big improvement from the 13.43% contraction recorded in the third quarter. The sector is critical for the Nigerian economy since it accounts for 90% of foreign-exchange reserves and the bulk of government revenue.
Back in May, Tinubu scrapped a costly but popular petrol subsidy and also lifted currency controls. But his actions have fuelled anger and frustration after inflation worsened and hit double digits. But Africa’s largest economy is not bereft of opportunities to expand the economy.
Nigeria and its African OPEC+ peer Angola have announced plans to boost oil production significantly in the coming years, something that might not go down well with other OPEC+ members as Saudi Arabia looks forward to starting to unwind its voluntary production cuts. Nigeria’s daily average oil output stood at 1.45 million barrels per day (mbpd) in the three months to September, up from 1.20 mbpd in the same period last year.
“We are not aware of any disagreements, it is more a matter of seeking alignments,” Nigeria’s governor to OPEC Gabriel Tanimu Aduda told Reuters.
“We are happy, we are waiting for the meeting,” Angolan OPEC governor Estevao Pedro told Reuters, referring to the upcoming OPEC+ meeting which was rescheduled to Nov. 30 from Nov. 26. “We are fighting to increase our production,” he said, adding that investment was being made to make that happen.
Nigeria produces the popular Bonny Light crude, a light-sweet crude oil grade and an important benchmark crude for all West African crude production. Bonny Light has particularly good gasoline yields, which has made it a popular crude for U.S. refiners, particularly on the U.S. East Coast.