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Vandalism: Oil sector’s contribution to GDP drops by 270 billion naira in nine months

By on November 24, 2021 0

The contribution of the crude oil and natural gas sector, which is a sub-sector of the mining and quarrying sector, to Nigeria’s gross domestic product increased from n 2.82 billion in the first quarter of 2021 to 2.55 tonnes in the third quarter, showing a 270 billion n or decrease of 9.57 percent.

This is according to data from the National Bureau of Statistics for the period under review obtained and analyzed by our correspondent.

Despite being the main contributor to the mining and quarrying sector for the period under review, the contribution of the crude oil and natural gas sector declined significantly in the second quarter and attempted a rebound in the third quarter.

In the first quarter of 2021, the sector was the main contributor to the mining and quarrying sector with a share of 99.47%, while contributing 2.82 billion naira to the GDP.

In the second quarter of 2021, there was a massive drop, with its contribution to GDP falling by 560 billion naira or 19.86% to 2.26 billion naira.

However, it remained the main contributor to the mining and quarrying sector with a weight of 91.88 percent.

There was a slight rebound in the third quarter of 2021 to cushion the decline. An increase of N290bn or 12.83 percent pushed the sector’s contribution to GDP to N2.55tn.

The sub-sector remained the main contributor to the mining and quarrying sector with an annual contribution weight of 89.65 percent.

However, while there appears to be a slight increase in the third quarter of 2021, its weight in the mining and quarrying sector has been steadily declining throughout the period under review.

Speaking on this development, an economist and CEO of the Center for the Promotion of Private Enterprise, Dr Muda Yusuf, said the sector has been affected by a number of factors such as insecurity, vandalism, political uncertainty, a difficult regulatory environment and low investment. feeling.

He said: “The sector contracted 10.73% in the third quarter. Responsible factors include disruption of production resulting from insecurity in the Niger Delta; the theft of crude oil and vandalism of oil production facilities.

He listed other factors including political uncertainty and political transition that have affected investor confidence and a difficult regulatory environment that is not conducive to investment and low investment sentiment.

A survey by Platts, an energy and commodities information provider and source of benchmark price assessments in physical commodity markets, showed that Nigeria’s crude oil production has fallen to 1.37 million barrels per day in October, compared to 1.39 million barrels per day.

According to the survey, the country’s oil production in October was 261,000 bpd below the quota allocated to it by the Organization of the Petroleum Exporting Countries and its allies.

He added that Nigeria’s oil production continued to be crippled by operational setbacks, with major pipelines facing persistent sabotage.

A new report from the Organization of the Petroleum Exporting Countries also showed Nigeria lost its status as Africa’s top oil producer to Libya as its crude oil production fell further in October.

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