IMF set to revise Nigeria’s economic growth outlook, as oil production rises to 1.35mbpd

International Monetary Fund (IMF) may revise Nigeria’s economic outlook for 2023 following a sudden rise in the country’s crude oil production to an all-time high of 1.35 million barrels per day (mbpd) in September 2023, representing the highest output per volume since this year.

Latest figures obtained from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), showed that the country’s output in September was about 14 per cent higher than what it pumped in the preceding month of August 2023.

It would be recalled that the IMF had downgraded Nigeria’s economic growth prospects for 2023 by 0.03, representing a drop to 2.9 in 2023, according to its recently released World Economic Outlook (for October) made public, Tuesday.

The IMF also disclosed that the projected drop in growth prospects follows a steady rising inflation rate reported in the country, since the start of 2023, and also in addition to reduced earnings from the oil and gas sectors.

The IMF’s World Economic Outlook (for October) is themed, ‘Navigating Global Divergences.’

Earlier in July, the IMF had projected that Nigeria’s economy would grow by 3.2 per cent in 2023. Then, it predicted that growth in the country would be impacted by security issues in the oil sector.

Commenting on its new prediction for the country, the Washington-based lender said the country’s growth is expected to decline from 3.3 percent in 2022 to 2.9 per cent in 2023 and 3.1 per cent in 2024, with negative effects of high inflation on consumption taking hold.

“Growth in Nigeria is projected to decline from 3.3 percent in 2022 to 2.9 per cent in 2023 and 3.1 per cent in 2024, with negative effects of high inflation on consumption taking hold.

The forecast for 2023 is revised downward by 0.3 percentage point, reflecting weaker oil and gas production than expected, partially as a result of maintenance work.”

Meanwhile, data from the NUPRC indicated that in September, Nigeria’s crude oil production (excluding condensates) was precisely 1,346,562 barrels per day, which was a 165,429bpd increase when compared to the 1,181,133bpd produced in August this year.

Further analysis of figures obtained from the NUPRC indicated that in January, February and March, the country’s oil outputs were 1,266,659bpd; 1,292,240bpd; and 1,266,737bpd respectively.

In the months of April, May, June and July, Nigeria produced 1,004,392bpd; 1,189,332bpd; 1,260,928bpd; and 1,089,089bpd respectively.

The above crude oil production figures therefore showed that Nigeria’s oil production in September was the highest output so far recorded by the country this year.

It would be recalled that last month, the National Bureau of Statistics (NBS) reported an 18-year-high rate of 25.8 per cent inflation rate for August.

The NBS in its report disclosed that the country’s inflation rate has now hit a staggering 25.8 per cent in August, a figure representing an 18-year high last recorded in August 2005.

In addition to the listed factors, the experts also identified logistics costs and money supply growth as fueling inflation rise in the country.

According to the NBS, the country’s August inflation figure rose for an eighth straight month from July’s 24.08%, compounding a cost of living crisis worsened by President Bola Tinubu’s reforms.

According to the NBS, Nigeria’s GDP grew by 2.51 per cent in the second quarter of 2023.

The last time Nigerians experienced this level of inflation was in August 2005, official data shows.

It would also be recalled that the Central Bank of Nigeria (CBN) raised rates by a smaller-than-expected 25 basis points in July, contrary to analysts’ expectations. It is due to set rates again on September 26 and some analysts expect a more hawkish stance.