Nigeria’s economic woes mount

For a major net oil exporter, Nigeria’s worsening economic struggles in the current high oil price environment are striking. Low oil production, which was 30% below the country’s OPEC+ quota in June, has curbed oil export revenues. Coming alongside draconian foreign exchange restrictions, the naira has continued to tumble on the black market. The fiscal side looks no better. Debt servicing costs exceeded revenues over the first four months of the year. In the meantime, it looks like the economy slowed over the first half of the year and we expect it to be much weaker than consensus expectations over 2022-23.