Following the recent passing of the N54.9 trillion 2025 national budget, there are concerns that Nigeria may have difficulties implementing the budget.
These concerns are traced to President Donald Trump’s energy policy, which is expected to drastically increase oil output and possibly crash global prices from the $75 per barrel that the Nigerian target has been based upon.
Should this become the case, Nigeria may not achieve its N19.6 trillion oil revenue and may have to resort to even more borrowings. Analysts project that it would also impact diaspora remittances and impact Nigeria’s inflation numbers as well.
Nigeria’s N54 trillion budget
The Nigerian Senate recently approved the 2025 national budget, after it had been increased from the N49.7 trillion earlier presented for approval.
The budget is hinged on about N19 trillion in expected oil revenues at a benchmark rate of $75 per barrel. Dr. Yusuf noted that if crude oil prices weakened in the coming months, it would affect the government’s projected FX earnings, especially from crude.
He, however, noted that energy prices of products like PMS, diesel, gas, and jet fuel could drop globally as a result, and this could mean some relief for individual consumers.
President Trump’s energy policy
US President Donald Trump has made it clear that the United States of America would be investing heavily to increase its oil and gas production.
The “Drill Baby Drill” policy targets increasing production for local consumption, but analysts say the increased supply could also cause a slump in global oil prices.
Dr. Muda Yusuf, the CEO, Centre for the Promotion of Private Enterprise (CPPE) noted that with the USA also being the largest oil producer globally, the further increase could lead to an oversupply in the global market, the VANGUARD reports.
He noted that in 2023, the USA produced 22% of the total global oil produced, with a daily production of almost 22 million barrels. A further increase in production could drop the global price of the product, thus affecting Nigeria’s projected oil revenues which were based on $75 per barrel.
He noted; “The USA is positioned to influence global oil output and prices, especially the Trump administration has committed to increasing oil output to reduce energy prices in the USA and globally. The country also has the global diplomatic clout to influence the OPEC oil output as President Trump has already signed an Executive Order creating a National Energy Dominance Council to drive the country’s energy dominance agenda.”
He added that with the body language of the Trump administration, it could intervene to end the Russian-Ukraine and the Israeli-Hamas war.
This would moderate global tensions and also increase crude oil production as Russia is known to contribute about 10 million barrels of oil per day to the global market.
Recall that the Trump administration has also moved to deport 201 Nigerians from the United States of America.
Source: www.legit.ng
