Connect with us

Business

Nigeria Spent 96.3% Of Revenue On Servicing Debt In 2022 – World Bank

Published

on

 

The World Bank has released a Macro Poverty Outlook for Nigeria, April 2023 brief, revealing that Nigeria used 96.3% of its revenue generated in 2022 to service debt.

 

The bank warns that the constant fiscal deficit has aggravated the nation’s public debt stock, which has surpassed 38% of GDP, and that the situation is unlikely to improve without macro-fiscal reforms.

 

According to the report, the fiscal position deteriorated in 2022 due to low non-oil revenues and high-interest payments, which compounded fiscal pressures. The cost of petrol subsidy also increased from 0.7% to 2.3% GDP in 2022, further exacerbating the situation.

 

As a result, Nigeria’s fiscal deficit was estimated at 5.0% of GDP in 2022, breaching the stipulated limit for a federal fiscal deficit of 3%.

 

The World Bank notes that Nigeria’s economic growth and poverty reduction efforts have been hindered by the cash scarcity created by the Central Bank of Nigeria’s naira redesign policy.

 

The bank projects that about 13 million Nigerians will become poor between 2019 and 2025 due to the policy’s impact.

 

To counter this, the report recommends macro-fiscal reforms to improve the country’s economic outlook and alleviate poverty.

 

The bank projects that Nigeria’s economy will grow by an average of 2.9% per year between 2023 and 2025, driven by services, trade, and manufacturing, but this growth rate is only slightly above the population growth rate of 2.4%.

 

Oil production is also projected to remain subdued due to inefficiencies and insecurity, which could further limit the country’s economic potential.

 

The report identifies several persistent structural economic issues, including volatile growth, low private investment, low and inefficient public spending, low revenue collection, low social development outcomes, and low productivity, that have prevented any meaningful acceleration of growth.

 

Insecurity remains widespread, with more violent conflict events occurring across the country, adversely impacting private investment and growth.

 

The World Bank warns that the deteriorating economic environment is leaving millions of Nigerians in poverty, with inflation reaching an annual average of 18.8% in 2022, a 21-year high. Food inflation, in particular, is a major concern, as it is estimated to have pushed five million Nigerians into poverty.

 

The bank notes that recurrently high inflation has been eroding the purchasing power of poor and vulnerable Nigerians, further increasing poverty.

 

The report highlights that multiple FX rates, the central bank’s provision of development finance at subsidized rates, and monetization of the fiscal deficit compromise the effectiveness of monetary policy in the country.

 

The bank concludes that risks are tilted to the downside given the lack of macro-fiscal reforms, naira demonetisation, and an uncertain external outlook.

 

The World Bank’s report reveals a deteriorating economic environment that is leaving millions of Nigerians in poverty.

 

Without macro-fiscal reforms, the country’s economic outlook is bleak, with recurrently high inflation, cash scarcity, and persistent structural economic issues further exacerbating the situation.

2 Comments
0 0 votes
Article Rating
Subscribe
Notify of
2 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
essentials fear of god
7 months ago

423680 207507I was reading some of your content on this website and I conceive this internet internet site is genuinely informative ! Maintain on putting up. 436721

cat888
5 months ago

414886 42476I enjoy what you guys are normally up too. This kind of clever function and reporting! Maintain up the really very good works guys Ive added you guys to blogroll. 221940

Business

Adoption of AI Feature as NIPetGE Pays Courtesy Call at NNPC Ltd

Published

on

Enhanced adoption of artificial intelligence and other digital technologies to improve operations in Nigeria’s oil and gas industry is taking the centre stage in relevant circles.

The issue came up strongly when the President-elect of the Nigerian Institute of Petroleum and Gas Engineers NIPetGE, Prisca Kanebi, paid a courtesy call at the Nigerian National Petroleum Company Limited (NNPC Ltd), Abuja.

Biztellers reports that the Kanebi led delegation was received by the Group Chief Executive Officer of the NNPC Ltd, Bayo Ojulari, represented by the Executive Vice President, Gas, Power and New Energy, Olalekan Ogunleye.

According to a statement made available on Sunday, discussions at the meeting focused on the future of Nigeria’s hydrocarbon industry amid global energy transition concerns, technological changes and sustainability targets.

ALSO READ: NNPC Ltd, IOCs Raise Crude Supply to Local Refineries by 103% in 4 Months

The statement indicated that the NNPC Ltd acknowledged the role of NIPetGE in policy advocacy, technical development and innovation within the sector.

Speaking during the meeting, Kanebi highlighted recommendations from the institute’s recent conference, including the proposed establishment of a national centre for intelligent energy systems to support the deployment of artificial intelligence, the Internet of Things and robotics across the petroleum value chain.

She also commended the Federal Government’s decarbonisation efforts and reiterated the institute’s support for policies aimed at improving sustainability in the industry.

The institute also recommended the creation of a hydrocarbon-linked emissions trading system to allow Nigeria to take part in global carbon markets.

The institute also proposed fiscal incentives to support local manufacturing and service delivery in the oil and gas sector, as well as the expansion of the Energy Transition Plan to include measurable upstream decarbonisation targets backed by tax credits.

Other proposals included increased public-private partnerships in emission control infrastructure, carbon capture projects and hybrid renewable energy initiatives.

Both organisations also stressed the need for stronger collaboration between industry and academic institutions to improve professional capacity and align petroleum engineering practice in Nigeria with international standards.

The institute further disclosed that its bill seeking chartered status had passed second reading and was progressing towards a third hearing at the National Assembly.

It added that NNPC Ltd pledged support for future collaborations with the institute on initiatives aimed at improving efficiency and innovation in the energy sector.

Continue Reading

Business

FHC Orders NUPRC to Comply with PIA

Published

on

Continue Reading

Business

Local Firms Lead Revival of Idle Oil Wells – SPE

Published

on

Nigeria’s indigenous oil and gas companies are reopening dormant wells and ramping up production from assets acquired from international oil companies (IOCs) to boost crude oil output.

The Society of Petroleum Engineers (SPE), Nigeria Council, made the assertion through its Chairman, Francis Nwaochie, on the sideline of the Offshore Technology Conference (OTC) which ended at the weekend in Houston, Texas.
Nwaochie said indigenous operators were already taking advantage of opportunities created by disruptions in the global energy market to increase production from existing assets.

According to him, local firms that recently acquired onshore and shallow water assets from IOCs were aggressively reviving inactive wells and maximizing available infrastructure to raise output levels.

“What we are seeing now is that indigenous companies are reopening wells from the assets they acquired from the IOCs. Some of them have almost doubled production from those existing assets,”.

He explained that the renewed focus on dormant wells and existing facilities had become critical at a time the global oil market was facing supply shortages triggered by geopolitical tensions in the Middle East.

The SPE Nigeria Council Chairman noted that Africa, particularly Nigeria, was well positioned to benefit from the supply gap because of the continent’s relative stability compared to some other oil-producing regions.

“There is a huge opportunity for Africa right now. The focus is gradually shifting to Africa because of the volatile environment in many other producing regions.”

He stated that indigenous operators were leveraging digital technologies, financing opportunities and local expertise to improve production efficiency and optimise existing fields.

He added that stronger implementation of local content policies was also helping to create a more stable operating environment for oil and gas investments.

“Local content is very critical. Once communities and local companies clearly understand their roles and benefits, then you create peace across the industry. Business only thrives in peaceful environments.”

ALSO READ: Nigerian Navy Recovers Large Cache of Illegal Refined Petroleum Products

Nwaochie also stressed the need for Nigeria to move beyond crude oil production and begin developing indigenous technologies for the energy industry.

According to him, SPE Nigeria Council was actively supporting innovation and technology development among young Nigerian engineers and researchers.

He disclosed that the association was engaging the National Universities Commission(NUC) on reforms to engineering curricula in universities to better prepare graduates for the future of the energy industry.

“One of our major focuses in SPE is technology development. We should not only import machines and equipment, we must begin to develop our own technologies locally.”

Nwaochie revealed that SPE was already supporting local innovators working on technologies such as remotely operated underwater vehicles (ROVs), noting that indigenous technology development will strengthen Nigeria’s economy and deepen local participation in the oil and gas sector.

“We may not get everything right immediately but we must start somewhere. That is how countries that dominate the global energy industry built their capacities.”

Continue Reading

Copyright © 2022. Biztellers, powered by Alphaxristi.

2
0
Would love your thoughts, please comment.x
()
x