July 16, 2024
B of A Research tasks President Tinubu on oil theft
BREAKING: Wike, Edun, others become ministers as President Tinubu releases list
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B of A Research tasks President Tinubu on oil theft

By Eyo Nsima

B of A Research has tasked the President Bola Ahmed Tinubu of Nigeria on oil theft, currently affecting the nation’s economy.

According to available data, Nigeria losses between 300,000 – 400,000 barrels per day, bpd to oil theft, a development that reduces its capacity to export commercial oil and generate adequate foreign exchange.

However, in its latest report – Nigeria Viewpoint – the organization maintained that tackling oil theft will go a long way to enhancing the growth of the nation’s oil-dependent economy.

It stated: “President Bola Tinubu’s political capital has delivered fuel subsidy removal and floating the naira with no social protests. With the current momentum, Tinubu’s next big move should be to reduce oil theft – by reforming the security sector and involving host communities near the pipelines.

“If successful, this could increase crude production to 1.6m bpd in 12-18 months, from the current 1.2m bpd, barring OPEC limits. Positive oil prospects plus the Dangote refinery coming online represent a potential structural improvement in Nigeria’s outlook. Nigeria depends on hydrocarbons for 90% of its exports, at least half of its fiscal revenues and about 6% of its Gross Domestic Product, GDP. Higher oil revenues and increased effort for non-oil revenue would ease the high debt service burden.”

With consistent reforms, the organization that believes Nigeria’s economy could be rated B+ in the next two years, stated: “Market-implied ratings from bond spreads are already B, adjusting faster than actual credit ratings. We think structural improvements will not only deliver the B rating next year, but even further prospects of B+ within two years. Nigeria has low external leverage and financing requirements including a manageable external debt-servicing burden. FX reserves are moderate and can absorb near-term external funding constraints. Moody’s Caa1 rating likely to be adjusted higher too.”
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