Nigerian Economy Lost Up To $100 Billion From Terrorist Attacks In 2016

Emmanuel Ibe Kachikwu, Nigeria’s Minister of Petroleum Resources, stated that his country lost from $50 to $100 billion of potential revenue from crude oil production in 2016.

From 1.757 million barrels per day in January 2016, production declined to 1.1 million bpd in August as the Delta Avengers hit oil pipelines and other infrastructure in the Niger River Delta. Aside from direct losses associated with falling oil production and costs for refurbishing the pipelines and rigs, the instability in Nigeria’s oil-bearing areas led to a decline in investments into the country.

However, Minister Kachikwu remains optimistic. A lot of hope is placed in the Nigerian government’s plan, which is aimed at putting an end to decades of civil strife in the Niger Delta by investing in the social sector and infrastructure.

“We need to pull the people out of conflict and place them in schools,” Kachikwu says.

Niger River Delta isn’t the only area that Nigerian higher-ups are interested in improving. As part of President Buhari’s policy of diversifying Nigeria’s economy, the Ajaokuta steel plant project, which began in 1979 under Soviet sponsorship and remained stagnant since the 90’s, could finally see completion.

But back to the Niger Delta, a ceasefire has been reached with the Delta Avengers in August 2016. This provided the Nigerian authorities room to recover lost crude oil production levels. As a matter of fact, Nigeria was going for 2.2 million barrels per day in December, but fell short with 1.94 million bpd (according to official data) by year-end, which was still sizable growth from the year’s lowest point. However, secondary sources indicate that Nigeria’s December production amounted to just 1.54 million bpd, as stated in the OPEC monthly report.

Still, no matter which data you find more to your liking, Nigeria could see its oil production increase further in 2017, as the OPEC member was exempted from the need to cut its output under the OPEC deal, so that the country could use the extra revenues to mend its struggling economy. According to the deal’s quotas, Nigeria is allowed to produce no more than 2.2 million barrels per day during the first six months of this year.