By Milcah Tanimu

The Federal Government has identified underinvestment as a key factor contributing to Nigeria’s recent decrease in crude oil production. Abubakar Bagudu, the Minister of Budget and Economic Planning, emphasized this during the Ministerial Sectoral Briefing held in Abuja.

Bagudu, a former Governor of Kebbi State, highlighted the government’s implementation of macroeconomic reforms under the “renewed hope agenda” to tackle the underlying causes of low investment and revenues.

“Our economy size was shrinking due to low investment and revenues,” Bagudu stated. “This has led to a decline in crude oil production, which falls below international standards and our OPEC quota, primarily because of underinvestment in both physical infrastructure and security.”

Despite President Bola Tinubu’s estimation of Nigeria’s crude oil production at 1.78 million barrels per day in the 2024 budget, recent reports from OPEC indicate a lower average daily production of 1.28 million barrels per day in April. This figure falls short of the 1.5 million barrels per day quota set by OPEC for Nigeria in 2024.

However, Mele Kyari, the Group Chief Executive Officer of the Nigerian National Petroleum Company (NNPC) Limited, offered a slightly different perspective. Kyari stated on May 19 that Nigeria’s oil production volume is closer to 1.7 million barrels per day, highlighting the nation’s potential to produce up to two million barrels per day if not for challenges such as pipeline vandalism and oil theft.