90% of Nigeria’s foreign exchange revenues in the first quarter of 2022 came from oil and gas; which is a big dependency for the country’s currency stability.
According to market sources, Nigeria’s inability to benefit from recently high oil prices are due to; extensive oil theft, rapidly rising gas incentives that continue to be an expense to the economy, and FX rumour by currency traders; which has caused the naira to drop to a record low of N740 to $1 on the black market.
The Monetary Policy Committee of the Central Bank of Nigeria admitted in Q1 that the economy’s vulnerability to increased oil theft prevents the nation from amassing foreign reserves.
Despite significant oil theft, crude oil accounted for 80% of Nigeria’s exports in the second quarter of 2022. Nigeria lost $1 billion in revenue due to crude oil theft in the first three months of this year; which is tied to the country’s underproduction.