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Nigeria to See Gradual Oil Recovery, Stunted Non-Oil Prospect in 2023

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Nigeria is expected to see a gradual recovery in its oil and gas sector in 2023, even as prospects for its much larger non-oil economy dims, according to Meristem in its outlook report.

There is a general consensus of an expected slower growth for the Nigerian economy in 2023.

The International Monetary Fund (IMF) recently revised its Nigerian real GDP growth forecast downwards to 3% (from 3.2% earlier expected) while the World Bank also slashed the same to 2.9% from an earlier projection of 3.20%.

The reasons for the slower growth projections are similar: slowdown in agricultural output due to the flooding, the impact of the CBN hawkish monetary policy on the real sector, as well as the lingering FX issues.

“On the one hand, the prospect for the oil sector is positive in 2023 as the FGN’s intensified efforts on combating oil theft and pipeline vandalism have begun to yield good fruits in terms of higher crude oil production. We also posit that the coming on stream of the Dangote Refinery portends positives for recovery of the oil sector,” Meristem said.

“On the other hand, we think that the expected slowdown in the non-oil sector will outweigh the gradual recovery in the oil sector.”

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