Nigeria’s economy faces mounting pressure as the country struggles, alongside Angola, to find buyers for its crude oil amid a global supply surplus, raising fresh concerns about public finances and the viability of the 2026 budget.
Traders and analysts told Reuters that West African crude sellers are finding it difficult to offload cargoes due in late December and January, as plentiful and cheaper alternative supplies from the Middle East, Russia, Argentina, and Brazil flood the market. As of Thursday, approximately 20 million barrels of Nigerian oil remained unsold, while Angola’s December–January programme had five to six cargoes still available.
“The overhang of West African cargoes partly reflects the broader global crude supply surplus emerging in Q1,” said Victoria Grabenwoger of analytics firm Kpler. Analysts noted that reduced imports by Africa’s largest refinery, the Dangote plant, which will undergo maintenance in January, have further compounded the challenge.
The slump in oil sales comes at a critical moment for Nigeria’s finances. The Federal Government recorded a revenue shortfall of about N30 trillion in the 2025 fiscal year, Finance Minister Wale Edun told the House of Representatives, citing subdued oil and gas receipts as a major contributor. Projected revenues of N40.8 trillion are now expected to end the year at only N10.7 trillion, placing severe strain on budget execution, debt servicing, and broader economic stability.
The shortfall has already forced the government to rely heavily on borrowing, raising fears over rising public debt. Former presidential candidate Peter Obi described plans to secure an additional ₦20 trillion loan for 2026 as “reckless,” warning that excessive borrowing without boosting production threatens the nation’s long-term stability.
The revenue gap has also complicated the passage of the 2026–2028 Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP). Lawmakers on Wednesday stepped down consideration of the framework after disputes arose over crude oil benchmark prices and revenue assumptions. The joint committee recommended lowering the oil price assumption to $60 per barrel for 2026, triggering concerns that the proposed ₦54.46 trillion 2026 budget may not be fully realizable without further borrowing or spending cuts.
Economists warn that unless Nigeria can regain competitiveness in the global oil market, the twin challenges of sluggish crude sales and persistent fiscal deficits could imperil economic recovery and delay the implementation of critical infrastructure, social, and security programmes.
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