Abuja, Nigeria — April 2025 — Nigeria’s financial stability is facing fresh threats as crude oil production continues to slide, hitting its lowest level yet this year and placig significant pressure on dollar earnings and national budget funding.
According to the latest data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), oil production — including crude, blended, and unblended condensates — dropped by 68,177 barrels per day (bpd) in March, dipping to 1.60 million bpd from February’s 1.67 million bpd. A closer breakdown reveals that crude oil output was 1.4 million bpd, with condensates accounting for 202,993 bpd (55,827 blended and 147,166 unblended).
This marks the lowest production level for the year so far, with January output at 1.74 million bpd and February at 1.67 million bpd. The NUPRC report also noted that March’s daily average production stood at 1,603,776 bpd, compared to a peak of 1.76 million and a low of 1.49 million during the same period.
Budget Targets Under Threat
The slump comes at a critical time. Nigeria’s economy, still heavily reliant on oil, had projected a 2025 output of 2.06 million bpd based on a benchmark oil price of $75 per barrel. With current production and global prices falling short of those targets, the country may struggle to fund key developmental projects or meet its revenue goals.
Compounding the issue, global oil prices have dropped following OPEC+’s decision to ramp up output in May, while geopolitical tensions — including renewed trade tariffs introduced by U.S. President Donald Trump — further complicate Nigeria’s economic outlook.
Economic Experts Sound the Alarm
Industry analysts are raising red flags over the implications of declining output and oil prices.
“This situation could lead to increased borrowing and worsen Nigeria’s already high debt profile,” warned Jide Pratt, COO of Aiona and country manager at TradeGrid. “The fall in prices highlights how vulnerable Nigeria still is to external shocks and makes the case for urgent economic diversification.”
He added that the end of the naira-for-crude oil swap deal could put further pressure on the nation’s foreign reserves, risking further devaluation of the naira and disrupting monetary and fiscal policy plans.
Time for a Rethink
Pratt urged the federal government to revisit its 2025 budget assumptions, explore supplementary budgets or financing options, and fast-track reforms to ease the strain. He emphasized the need to invest in sectors such as agriculture, trade, fintech, and even consider asset privatization as paths to sustainable growth.
“Lower production equals lower revenue and reduced dollar inflows. It puts the entire economy at risk,” he added.
Mounting Fiscal Risks
Ike Ibeabuchi, an emerging markets analyst, echoed similar concerns.
“Nigeria is facing multiple fiscal threats: declining oil output, falling oil prices, rising global tariffs, and mounting debt,” he said. “If oil production continues this downward trend, it will hit our dollar earnings hard and weaken the naira even further.”
Ibeabuchi warned that this scenario could leave Nigeria struggling to meet both its debt obligations and developmental promises to its citizens, heightening economic uncertainty in the months ahead.
