- fastest pace compared to other regions.
President Tinubu
Libya overtook Nigeria to emerge the top African crude oil producer in March, data from the Organization of Petroleum Exporting Countries (OPEC) has shown.
The North African country recorded 1.24 million barrels per day (bpd) of crude production in March, a 5.7 increase from 1.17 million bpd in February, according to the April 2024 Monthly Oil Market Report published by the oil cartel.
Nigeria recorded an output of 1.23 bpd in March, the lowest since July 2023, down from 1.32 million bpd in February.
The drop of almost 91,000 bpd, according to direct communication to OPEC, underscores the difficulties the Nigerian oil sector faces, such as limited infrastructure, security breaches in oil-producing areas, and operational hiccups.
Experts said large-scale oil theft from pipelines and wells has been one of President Bola Tinubu’s biggest challenges in recent years, dampening government finances and limiting the country’s output and exports.
“We aren’t curbing oil theft nor are we taking or making quick wins at our wells that need to be boosted or optimised,” Jide Pratt, country manager at Trade Grid and an energy analyst.
“We have lost another 100,000bpd; what are Gabon, Saudi and Kuwait doing that we need to copy to increase production?”
Last month, the Nigerian National Petroleum Company Limited (NNPC Ltd) appealed to the Economic and Financial Crimes Commission (EFCC) to help tackle the menace of crude oil theft in the country.
Speaking about the efforts by NNPC Ltd to eradicate corruption from its system and stem crude oil theft and pipeline vandalism, Mele Kyari, the group chief executive officer of the company, contended that going by the volume of oil stolen daily and the brazenness with which the perpetrators operate, crude oil theft was the most humongous and virulent economic crime in Nigeria that must attract the attention of the EFCC.
“As we continue to do our best to deepen transparency and stamp out corruption from the system, there is one big challenge that you will need to help us with. That challenge is crude theft,” Kyari said at an interactive session with Ola Olukoyede at the NNPC Towers in Abuja.
In recent years, Nigeria has recorded a surge in pipeline vandalism and crude oil theft incidents in its oil-producing region, a development that worsened the nation’s revenue challenge.
To curb crude theft, the NNPC Ltd launched an application in August 2022 to monitor the incidence of theft and vandalism. The NNPC Ltd also awarded a multibillion-naira pipeline surveillance and procurement to a former leader of the Movement for the Emancipation of Niger Delta, Government Ekpemupolo.
Despite such initiatives, Nigeria continues to experience significant oil losses to vandals, prompting several international oil companies to shift from the onshore sector to offshore.
Experts said the reduction in Nigeria’s crude oil production coincides with production cuts being implemented by OPEC and its allies, notably Russia, in an effort to stabilise the world oil markets and maintain prices.
To guarantee that agreed-upon quotas are being followed, the OPEC+ group, headed by Saudi Arabia, has been closely watching the output levels of its members.
In a related story, the World Trade Organisation (WTO) in its trade outlook for 2024 has projected that exports from Africa will increase at the fastest pace in 2024 by 5.3% when compared with other regions.
The report noted that the continent’s exports will exceed pre-pandemic levels, but imports will continue to limp as a result of higher energy and commodity prices.
Between 2019 and 2023, the continent saw its imports decline by 5%- the worst in the world -meaning that increase in exports did not translate into higher consumption and income across the continent.
The report reads, “If current projections hold, Africa’s exports will grow faster than those of any other region in 2024, up 5.3% from a low base since the continent’s exports remained depressed after the COVID-19 pandemic.”
Trade in digital services
In terms of trade in digital goods, Africa saw growth in its exports of digital goods although it just represented 0.9% of exports in that category.
Overall, global exports of digital services grew by 9% in 2023 to reach $4.25 trillion, representing around 13.8% of the global export of goods and services.
Furthermore, the report projected that global trade would grow by 2.6% this year and 3.3% in 2024 after a decline of –1.2% last year. However, it anticipated certain risks such as geopolitical uncertainties especially with policies, conflicts in Europe and the Middle East and the attendant effects on global supply chains coupled with climatic change effects in the Panama Canal.
Specifically, the report mentioned trade disruptions in the Suez Canal which handles around 12% of global trade connecting Europe to Asia as a flash point risk in 2024.
It stated that the additional 10-day freight to circle around the Cape of Good Hope will result in additional costs to container rates which only began to fall to pre-pandemic levels by the middle of last year.
The report also forecast a spike in food and energy prices, coupled with elevated interest rate levels across advanced economies, as other risks that could dampen the resurrection of global trade from its negative growth in 2023.
