By Chibisi Ohakah, Abuja
The Centre for the Study of the Economies of Africa (CSEA), has called on the Nigerian government to tighten security in the Niger Delta. The move, the Center said, would be the step towards improving productivity and halting dwindling oil revenues for the country.
The CSEA is a regional think tank research firm focusing on activities in Africa’s economies. The call by the Center is contained in the latest Nigeria Economic Update Issue 46 issued yesterday.
Analysts from the Center advised that in other to improve oil sector’s contribution to the nation’s Gross Domestic Product (GDP) on a sustainable basis, the Nigerian government should improve collaboration with the oil producing communities in the Niger Delta should be prioritized by the government.
Quoting Organization of Petroleum Exporting Countries (OPEC) estimates, researchers in the Centre notes that Nigeria produced about 1.25 million barrels per day (mbpd) in October 2021, below the budgeted crude oil production level of 1.86 mbpd in the 2021 budget.
They also observed that crude oil production recorded a decrease of 9% year on year from 1.3 million in October 2020 to 1.2 mbpd in the month under review just as on a month-on-month basis, Nigeria’s total oil production decreased slightly from 1.25 mbpd, decreasing by about 200,000 bpd.
They CESA attributed the decrease in output to rising pipeline vandalism and bunkering in the Niger Delta. The research organization further noted that as oil production level falls, government revenue falls, thereby shrinking the fiscal space and leaving the government with the option of borrowing.
This is even as the organization’s experts pointed out that the fall in oil output level had continued to put pressure on the value of the national currency, the Naira, as crude oil remains Nigeria’s primary revenue earner.
The CSEA said there is urgent need for Nigeria to actualize the revenue projection from the oil sector. “The government in collaboration with security agencies must strengthen relations with host communities in securing oil installations.
“The government can also leverage on technology by utilizing satellites with geo information systems to effectively monitor pipelines”, the Center said.
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