Nigeria’s earnings from oil exports to shrink in 2024 — CBN

The Central Bank of Nigeria (CBN) on Thursday said the country’s earning from oil exports is expected to shrink in 2024.

CBN governor, Olayemi Cardoso, said this was due to the oil production limit, which is pegged at 1.78 million barrels per day in the 2024 budget assumption.

Cardoso stated this in his presentation at an interactive session with the National Assembly joint committee on Banking, Insurance and other Financial Institutions at the National Assembly, Abuja.

He said the approved quota for Nigeria by the Organisation of Petroleum Exporting Countries (OPEC) was 1.8 million barrels per day but the country’s production has been below the threshold.

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“We expect less revenue from oil exports due to the production limit of 1.78 mbpd in 2024,” Cardoso told the lawmakers from both chambers.

In the 2023 budget, the oil production benchmark was pegged at 1.69 million bpd but the apex bank governor said Nigeria’s highest level of production was about 1.35 mbpd in the third quarter of 2023.

He blamed the underperformance of the oil production target on crude oil theft and pipeline vandalisation, production shut-ins and divestments by major oil companies.

Cardoso, however, said the outlook for the domestic economy in Nigeria for 2024 was positive as both the inflation and exchange rates would withstand fluctuating pressures and stabilise.

“The outlook for the domestic economy remains positive and is expected to maintain a positive trajectory for 2024.

“Inflation pressures may persist in the short-term but are expected to decline in 2024. Exchange rate pressures are also expected to reduce significantly with the smooth functioning of the foreign exchange market,” he said.

He said the unification of the exchange rate windows in June 2023 has ushered in a new approach to the management of the exchange rate, aimed at reducing arbitrage, rent-seeking behaviour and speculation in the market.

“The policy aims at creating a market where the demand and supply of foreign exchange determines the exchange rate.

“The premium has narrowed and our focus on increasing the autonomous FX supply would lead to more stability and further narrowing of the premium.

“Total Trade in the third quarter of 2023 stood at N18.804.68billion. Exports were valued at N10.346.60 billion while total imports stood at N8.457.68 billion. This represents a positive trade balance, which would lead to an increase of the external reserves,” he said.