Dr. Olusegun Omisakin, Director of Research and Chief Economist at the Nigeria Economic Summit Group (NESG), emphasized the necessity for Nigeria to optimize its crude oil production and other natural resources to improve its economic outlook. Speaking at the Nairametrics Quarterly Macro-Economic Outlook webinar titled “Renewed Hope or Reality Check? Identifying Opportunities in a Volatile Economy,” Omisakin underscored the pivotal role of the oil sector in Nigeria's economy.
Omisakin highlighted that Nigeria’s average daily crude oil production in June 2024 was 1.276 million barrels, falling short of the OPEC quota of 1.5 million barrels per day and the national budget target of 1.78 million barrels per day. He stressed that increasing production to at least 2 million barrels per day is crucial for economic stability and growth.
Nigeria's economy is heavily reliant on oil revenue. Despite some progress made by the current administration, Omisakin pointed out that long-term strategies must be implemented to address the low productivity in key sectors such as mining, oil, and gas. He argued that without optimizing natural resource production and value addition, economic improvement would remain elusive.
Omisakin acknowledged the improved policy environment under President Bola Tinubu’s administration but urged for a combination of long-term and short-term reforms. He noted that merely achieving short-term impacts would not suffice. Structural issues such as low production capacity and insufficient job creation must be addressed to ensure sustainable economic growth.
Omisakin noted that many sectors contributing to Nigeria's economic growth lack the capacity to create jobs, leading to high unemployment rates. He advocated for a deeper examination of the economy's structure and a focus on enhancing productivity capacity across all sectors.
While acknowledging various government policy interventions, Omisakin stressed the need for addressing core structural issues like low production and job creation. Effective policy implementation should positively impact the lives of Nigerians, he emphasized.
Mele Kyari, CEO of the Nigerian National Petroleum Company Ltd., recently declared an aggressive strategy to address challenges in the country’s crude oil production. Kyari called for collaboration within the oil and gas industry to eliminate obstacles, including delays in procurement processes, which hinder effective production.
Kyari highlighted that Nigeria has the potential to produce two million barrels of crude oil per day without deploying new rigs. However, prompt and effective action is required to achieve this potential.
To realize economic stability and growth, Nigeria must prioritize optimizing its crude oil production and addressing structural issues in key economic sectors. Long-term policy reforms aimed at boosting productivity and job creation are essential for sustainable development and improved living standards for Nigerians.
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