The Nigerian Economic Summit Group (NESG) has raised concerns over the persistent underperformance of the oil and gas sector, warning that it poses a significant threat to the effective implementation of the 2025 budget.
In its latest publication titled “NESG 2025Q1 GDP Alert,” the private sector-led think tank observed that Nigeria’s crude oil production in the first quarter of 2025 fell well below the government’s budget benchmark of 2.06 million barrels per day (mbpd).
This shortfall, the NESG warned, translates directly into lost oil revenues, which are critical to funding key government expenditures outlined in the budget.
“Persistent slowdown in the oil and gas sector poses a threat to the execution of the 2025 budget,” the group noted.
“In 2025Q1, the average crude oil production is significantly below the budget benchmark of 2.06mbpd, translating to lost oil revenues needed to implement the budget.
“This suggests the urgent need to resolve challenges facing domestic crude oil production, including ageing infrastructure, oil theft, pipeline vandalism, and kidnapping of expatriate workers,” the report stated.
The group commended the improvements in the refining sector’s performance in recent months.
“Persistent improvement in the Oil refining sector is remarkable,” NESG noted.
It, however, noted that there is a need to revive state-owned refineries to sustain the sector’s growth.
“The emergence of Dangote Refinery has been a game-changer for Nigeria’s oil and gas sector, reversing more than half a decade of contraction in the Oil refining sector and slashing import bills on petrol by about 53 percent (year-on-year) in 2025Q1. This suggests the need to support privately owned refineries and incentivise investments into the downstream oil and gas sector,” NESG noted.
The NESG welcomed the improved capturing of informal sector activities following the rebasing.
The group stated that efforts need to be geared towards transitioning informal sector players into the formal sector.
It stated, “An example is the new tax laws, which, when implemented on January 1, 2026, will reduce the value-added tax (VAT) burden for many small and medium-sized enterprises. This could prompt voluntary business registration and reduce the pervasive incidence of business closures nationwide.”
The group, however, expressed worries about developments in the agricultural sector, saying it needs urgent support to avert a potential surge in food prices.
“The rebasing exercise has significantly increased the share of the Livestock subsector in total Agricultural GDP from 4.8 percent in 2024Q1 (using the old base year) to 16.1 percent in 2024Q1 and 13.4 percent in 2025Q1 (using the new base year), attributed to the improved capture of informal activities. This suggests the need to address incessant communal clashes between the farmers and the herders to enhance crop and livestock production, with downward pressures on food inflation,” NESG noted.
The National Bureau of Statistics has said that Nigeria’s Gross Domestic Product (GDP) stood at N372.8 trillion in 2024, after the base year for calculating the figure was shifted to 2019.
The National Bureau of Statistics has said that Nigeria’s Gross Domestic Product (GDP) stood at N372.8 trillion in 2024, after the base year for calculating the figure was shifted to 2019.
According to the NBS report, the rebased nominal GDP at basic prices in 2019 reflected.