Theft responsible for oil sector contraction by 8.3% – Expert

The crude oil sector contracted by 8.30 per cent due to intractable oil theft and vandalization of pipelines, the Centre for the Promotion of Private Enterprise (CPPE) has said. The National Bureau of Statistics (NBS) had said Nigeria’s GDP grew by 3.40 per cent in 2021, marking the highest GDP growth rate since 2014.  The […]

The crude oil sector contracted by 8.30 per cent due to intractable oil theft and vandalization of pipelines, the Centre for the Promotion of Private Enterprise (CPPE) has said.

The National Bureau of Statistics (NBS) had said Nigeria’s GDP grew by 3.40 per cent in 2021, marking the highest GDP growth rate since 2014. 

The growth performance is also higher than projections by the International Monetary Fund (2.6%) and the World Bank (2.7%).

The Chief Executive Officer of CPPE, Dr. Muda Yusuf, in his analysis also disclosed that divestment by oil majors from the upstream oil sector; lack of political will on the implementation of the Petroleum Industry Act, which weakened investors’ confidence; and rapidly evolving global energy transition have made it difficult for fossil fuel investments to attract funding and stifling regulatory environment.

He said the oil refining sector recorded the biggest contraction in 2021 (47.94 per cent) because it is characterized by an unfriendly policy environment.

According to the sectorial disaggregation of the annual GDP data, some sectors and subsectors recorded positive growth, while some contracted.

Sectors that contracted include oil refining (47.94%), crude oil production (8.3%), textiles and apparel (1.27%), wood and wood products (1.54%), pulp and paper industry (0.32%), accommodation and food services (0.45%).

Sectors and subsectors that recorded positive growth are rail transport (36.95%), air transport (19.70%), road transport (17.13%), financial institution (10.53%), insurance (6.24%), trade (8.62%), cement production (6.64%), chemical and pharmaceuticals (8.13%), food and beverages (5.73%), motor vehicles and assembly (4.23%), construction (3.09%), ICT (7.28%) and real estate (2.26%).

 The growth performances, he said, reflected the progressive recovery from the shocks of the pandemic and the rebound of economic activities in the sectors.