Nigeria Oil Production Fell 40% in 2022 From Prepandemic Levels, World Bank Says

Nigeria’s oil production fell by 40% last year compared to its 2019 level, lowering economic growth to 3.1% from 3.6% the prior year, the World Bank said Tuesday.

Production dropped to one million barrels a day, the bank said in its January global economic prospects report.

The fall was attributed to technical problems, insecurity, rising production costs, theft and lack of payment discipline in joint ventures.

In addition, persistent underinvestment, partly because of the diversion of oil revenue to petrol subsidies, estimated at over 2% of gross domestic product, also contributed to the drop in production, the bank said.

Annual inflation surpassed 21% in 2022 for the first time in 17 years, disrupting activity and consumer demand, it said.

Persistent fuel and foreign exchange shortages, with the Nigerian currency depreciating by over 30% last year in the parallel market, further dampened economic activity, the World Bank said.

Nigeria’s growth is projected to decelerate to 2.9% in 2023 and 2024, it said.

“The fiscal position is expected to remain weak because of high borrowing costs, lower energy prices, a sluggish growth of oil production, and a subdued activity in the non-oil sectors,” the bank said.

Nigeria is currently Africa’s second largest oil producer, after it was overtaken by Angola in May 2022, according to the Organization of Petroleum Exporting Countries.
Source: Dow Jones Newswires