Nigeria’s economy can expand by 2.5 per cent next year, rebounding from a recession entered in the second quarter, as long as it can keep oil output at 2.2 million barrels per day, a senior Moody’s analyst said.
Africa’s largest economy faces its worst crisis in 25 years, brought on by low oil prices which have slashed government revenue, hammered its currency and caused chronic dollar shortages frustrating businesses.
Aurelien Mali, Moody’s senior analytical adviser for Africa, told Reuters late on Sunday that increases in oil output will help Africa’s top oil exporter generate more dollars.
“With resumption of oil production and the dollars that should come, we expect that Nigeria would be able to accelerate the implementation of the budget,” Mali said.
“With acceleration, we expect that (growth) could reach 2.5 percent next year,” he said.
Oil minister Ibe Emmanuel Kachikwu said in September that production was recovering and had reached around 2 million barrels after months of attacks, mainly by the Niger Delta Avengers, on oil installations cut output by over 600,000bpd.
Nigeria produces oil through sharing contracts and joint ventures with foreign and local firms. But it has often failed to fund its own contributions. Last week, it reached a deal to pay $5.1 billion in unpaid bills to oil majors.
Oil producer Shoreline Natural Resources has said Nigeria will need at least $14 billion a year in new investment to maintain production at 2.2 million bpd, a level which the national budget is based on.
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