There has been no major disruption to oil output in the Niger Delta in 2017, thanks to a ceasefire in late 2016 resulting from peace talks between the federal government and local leaders. The stability and upsurge in oil revenue is helping the government deal with the struggling economy and pursue budget targets, but what is the outlook?
The present stability in the Niger Delta remains fragile, but it looks sustainable given the relatively healthier relationship between the federal government and local stakeholders. We expect peace talks will be sustained and that the present government will maintain efforts to address the region’s needs in conjunction with stakeholders on the ground. Reports from sources on the ground suggest that corruption investigations affecting top politicians from the region may be temporarily muted to pave way for more cooperation.
President Muhammadu Buhari recently launched a 2017-2020 economy recovery and growth plan (ERGP) that ultimately targets single-digit inflation, real GDP growth of 7% and an oil output of 2.5 million bpd by 2020. Given the significant role that oil revenue plays in the economy, a return to normalcy in the Niger Delta will clearly reflect positively on the investment climate and will help to steer the country towards the attainment of goals laid out under the ERGP. However, risks still remain with Nigeria’s exposure to changes in global oil prices, and from a security perspective, the various stakeholders who are delicately holding together the relative stability in the Niger Delta will be under pressure to maintain the balance and keep the peace.