February 17, 2025
Nigeria’s ambitious 2025 budget, totaling ₦54.99 trillion, heavily relies on oil revenues, projecting ₦19.6 trillion from this sector. However, recent shifts in U.S. energy policy under President Donald Trump may jeopardize these projections.
President Trump’s “Drill, Baby, Drill” initiative aims to boost domestic fossil fuel production, potentially leading to an oversupply in the global oil market and a subsequent decline in prices. Such a scenario could significantly impact Nigeria’s revenue, as the budget is predicated on an oil price benchmark of $75 per barrel. Analysts warn that increased U.S. output might depress global prices, making it challenging for Nigeria to meet its revenue targets.
Dr. Muda Yusuf, Director/CEO of the Centre for the Promotion of Private Enterprise (CPPE), expressed concerns that heightened U.S. production could lead to a drop in oil prices, adversely affecting Nigeria’s government revenue and foreign exchange earnings.
In addition to external pressures, Nigeria faces internal challenges, including infrastructure deficits, oil theft, and OPEC+ production quotas, which further complicate efforts to achieve the projected oil revenue.
To mitigate these risks, experts advocate for Nigeria to diversify its economy, enhance non-oil revenue streams, and improve domestic oil production efficiency. Such measures could help cushion the potential adverse effects of global market fluctuations influenced by U.S. energy policies.