Nigeria may see a 33 per cent rise in its oil production from 2.35mn bpd on an average currently to a new high of 3.13mn bpd by 2030, a new report has stated
The report from the McKinsey Global Institute (MGI) namely Nigeria’s renewal: Delivering inclusive growth in Africa’s largest economy examines that with the right reforms and investments, the West African nation can become one of the world’s leading economies by 2030.
The oil and gas industry currently accounts for 75 per cent of the Nigerian government’s revenue and up to 95 per cent of dollar earnings. While the sector is expected to grow by 2.3 per cent a year at best, its success is still vital to Nigeria’s economy, the report added. It would then contribute US$108bn annually to the economy compared with US$73bn in 2013.
Since 1999, Nigeria has proven to be both politically and economically stable and new data released this year show that it is now the largest economy in Africa, in addition to being the most populous. The new data also show that Nigeria’s economy is far more diverse than previously understood. While the nation’s rich oil reserves remain a critical source of government income and exports, the entire resources sector today is only 14 per cent of GDP. Agriculture and trade are larger and faster-growing.
Reinaldo Fiorini, director of McKinsey’s Lagos office, said, “What people overlook is Nigeria’s extraordinary advantages for future growth, including a large consumer market, a strategic geographic location, and a young and highly entrepreneurial population.”
Looking ahead, the report finds that Nigeria has the potential to expand its economy by roughly 7.1 per cent per year through 2030, raising GDP to more than US$1.6 trillion. This could make Nigeria a top-20 global economy — with higher GDP than the Netherlands, Thailand or Malaysia in 2030.
The firm suggests that while government has put in place clear strategies and plans for various sectors, the most important step that government can take now is to improve its ability to deliver its programs and services. These range from ‘safety-net’ support payments to the poor, to health care, education and infrastructure.