Despite Oil nearing $100 Nigeria still suffers from wasteful spending

With prices trading near a seven-year high as crude makes a roaring start to 2022, the finances of Africa’s most populous nation remain precariously challenged by corruption and bad management.

Nigeria’s opaque oil industry is hobbled by inept policies which meant the flight of badly needed investment resulting in the failure to produce more oil to take advantage of soaring oil prices.

The country’s president also doubles as petroleum minister but a lack of clear understanding of changing global energy dynamics and a damaging fuel subsidy regime has left Nigeria’s oil output below her OPEC quota.

“Nigeria is like a man who is dying from dehydration despite being in the midst of a ferocious rainfall,” says economist Festus Ogbobine.

Brent hovered near $92 a barrel while West Texas Intermediate rose 2% for the week as robust demand tightened global markets. As supply remains constrained, a chorus of Wall Street banks and oil executives are forecasting a return to $100 oil.

Additionally, heightened geopolitical risks driven by fears that Russia may invade Ukraine have also contributed to crude’s climb.