Nigeria's Budget Under Pressure as Offshore Oil Output Falls Short

Nigeria's fiscal situation remains precarious due to weak offshore crude production, despite rising global oil prices. The country produced an average of 1.505 million barrels per day in July, exceeding its Organisation of the Petroleum Exporting Countries (OPEC) quota for the third consecutive month, but still 4% lower than June output.

The weaker-than-expected production has left a significant gap between actual and budgeted oil volumes, constraining the government's revenue plans. The price increase, however, has provided some cushion, pushing Nigeria's realised crude prices to around 29% above the budget benchmark of $64.85 per barrel.

MoneyAfrica estimates that gross oil revenue in the first half of this year may have exceeded budgeted levels, but notes that higher prices have only partially offset lower export volumes, leaving the country exposed to a potential price reversal and production disruptions.