Bola Tinubu starts off his presidential term on a good note as Nigerian economy already grew by 2.4%
Bola Tinubu, the new President of the Federal Republic of Nigeria, pledged a couple of weeks ago that his presidency would focus on addressing the most pressing economic issues rather than concentrating on the oil sector. He believed that the oil sector would do well on its own without the government attempting to control its production and distribution. It seems that this bet has already started to pay off.
Indeed, Nigeria reclaims its position as Africa’s top crude oil producer in May 2023, surpassing Angola, Libya, and Algeria. For many years, more crude oil was produced in Nigeria than in any other country in Africa. But unplanned production outages at times led to its crude oil production failing below that of Angola, the second-highest producing country in Africa. Nigeria’s crude oil production progressively declined between 1997 and April 2023. Between 2009 and April 2023, Nigeria and Angola were more or less equal in their oil output as we could see in the graph below. According to the U.S. Energy Information Administration, Angola’s crude oil production grew rapidly after the civil war ended in 2002, and briefly surpassed Nigeria’s crude oil production for the first time.
Crude Oil Production in Nigeria & Angola, Jan 1997-April 2023
Source: U.S. Energy Information Administration
As Nigeria regained its status as top crude oil producer on the continent, OPEC report highlighted Nigeria’s economic growth despite challenges, with a 2.4% year-over-year increase in the first quarter of 2023. Moreover, the Nigerian Upstream Petroleum Regulatory Commission reveals a daily crude oil production of 1.4 million barrels in May 2023, including both crude oil and condensates.
A report by Nigeria’s Nairametrics, a business, and economic daily newspaper, shows that in May, Nigeria produced 1.184 million barrels of crude oil per day during the month, according to direct communication data provided by OPEC. In comparison, Libya produced 1.158 million barrels per day, Angola produced 1.111 million barrels per day, and Algeria produced 962,000 barrels per day.
The fact that Nigeria regained its status as top oil producer enabled President Tinubu to focus on more important economic issues that affect ordinary Nigerians on a daily basis, and to leave the oil industry to the private sector. Indeed, the Nigerian economy needs massive help. In April 2023, annual inflation rate was reported to be at 22.2%, which indicates further acceleration when compared to the 22% rate in March 2023. According to Business Insider Africa, these elements, together with a downturn in the services, industrial, and agricultural sectors, add to Nigeria’s economic woes.
While this growth of 2.4% seems promising, there is still a lot of work to be done for the Nigerian economy to recover. Nigeria’s new President Bola Tinubu vowed at his swearing to expand the economy by at least 6% a year, lift barriers to investment, create jobs, and unify the exchange rate, while also tackling rampant insecurity.
It is still too early to judge President Tinubu’s performance. But for now, the fact that Nigeria is again the leading oil producer and the economy slightly grew under his leadership are both signs of positive outcomes.