The Nigerian economy has experienced a slow return to normalcy in recent months. A recent economic update published by the World Bank projected that the Country’s economy is expected to grow by 1.8% in 20211 and further predicted that, by the end of 2021, the Country’s Gross Domestic Product (GDP) would likely approach its 2010 level; thus reversing a full decade of economic growth. On its part, the International Monetary fund (IMF), predicts that the economy will grow by 2.5%2. Despite these predictions, the Nigerian GDP only grew by 0.51%3 in the first quarter of 2021, indicating a slow and tortuous path to economic recovery.

Furthermore, given the outbreak of a new COVID-19 variant (the Delta Variant), there are concerns as to when the global and local economic climate will return to normalcy. This development further creates uncertainty about the general outlook for the oil and gas sector and the Country’s economy. While it is expected that there would be an increase in oil exports as well as domestic demand for crude oil products, Nigeria’s recovery is expected to underperform those of other oil producing countries.

This edition of our newsletter focuses on some noteworthy developments and how these developments will impact the growth of the Nigerian oil and gas sector and the economy at large.

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Wale Ajayi

Partner & Head, Tax, Regulatory & People Services

KPMG in Nigeria