- Revenue received by the federation from crude oil sales, Petroleum Products Taxes (PPT), and royalties (after subsidies provided by Nigerian National Petroleum Corporation (NNPC) and cash calls) has decreased from $45 billion in 2011 to $32.3 billion in 2014, according to International Monetary Fund (IMF) Country Report on Nigeria.
- Besides, between 2011 and 2014, oil lifting fell from 2.38 to 2.19 mbpd (71⁄2 per cent decline), largely due to stoppages associated with pipeline vandalism. The report, which was released on Monday, stated that the drop in oil revenue over 2011 to 2014, was larger than expected from the evolution of oil prices and production.
- The IMF said that in 2015, oil exports are projected to decline by six percentage points (ppts) of Gross Domestic Product and oil revenue by 2.4 ppts of GDP from 2014 levels, with a reduction in the current account balance and loss in international reserves.
- IMF noted that a sharp contraction in public investment and domestic demand is projected to reduce growth to 4¾ percent, with inflation increasing to 11½ percent from the effects of exchange rate depreciation.
“The authorities adopted bold policy actions in November 2014— an adjustment in the official foreign exchange rate and band, tightening of monetary policy rates, and spending cuts totaling 1.7 ppts of GDP in the proposed 2015 budget”, it added.
- The lender however said the government has expressed its determination to implement appropriate measures to manage risk.
“They agreed that the oil price shock is significant and, at least in part, permanent, but saw a smaller effect on economic activity, owing to measures targeted at sectors critical for growth (agriculture, power, small enterprises) and the impact of remittances. They noted that rising food self-sufficiency would limit the pass-through to inflation and activity in housing construction would continue,” it said.