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Nigeria’s Oil Falls, Records Negative Growth

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Amid the collapse of oil prices and demand, Nigeria’s oil and gas sector saw its contribution to the economy tumble in the second quarter of this year as it recorded negative growth.

For the first time in more than three years, the nation’s economy shrank in Q2 2020 as the Gross Domestic Product fell by 6.10 per cent, compared to a growth of 1.87 per cent in the previous quarter.

The NBS, in its GDP report for the second quarter of the year, said the oil sector, which grew by 5.06 per cent in Q1, declined by 6.63 per cent year-on-year in Q2, indicating a decrease of 13.80 per cent compared to the same period of 2019.

“The oil sector contributed 8.93 per cent to total real GDP in Q2 2020, down from figures recorded in the corresponding period of 2019 and the preceding quarter, where it contributed 8.98 per cent and 9.50 per cent respectively,” it said.

The NBS said the average daily oil production in the country fell to 1.81 million barrels per day in Q2 from 2.07 million bpd in the previous quarter and 2.02 million bpd in Q2 2019.

The Organisation of the Petroleum Exporting Countries and its allies, known as OPEC+, agreed in April to an output cut to offset a slump in demand and prices caused by the coronavirus crisis.

They decided to cut supply by a record 9.7 million bpd for May and June but the deal was extended in July by one month.

Under the April deal, Nigeria was expected to cap its production at 1.41 million bpd in May and June but the country overproduced during the period.

The Lagos Chamber of Commerce and Industry attributed the low level of crude production in the period under review to OPEC+ production cut agreement aimed at rebalancing the oil market.

The LCCI said, “We also note that the economy experienced stockpiles of unsold crude cargoes particularly in April and early May, due to collapse in crude demand from Asia and Europe.

“In addition to these, the steep contraction was also fuelled by weakening oil prices witnessed in the quarter. We note that oil prices averaged $33 per barrel in Q2 2020 compared to $51 per barrel in the first quarter.”

The OPEC+ production cuts have helped lift the price of the international oil benchmark, Brent crude, from a low of around $16 per barrel in April. It stood at $45.91 per barrel as of 6:45pm Nigeria time on Tuesday.

The Director-General, Budget Office of the Federation, Ben Akabueze, had said in May that the nation’s oil revenues had declined by nearly 90 per cent amid the slump in prices caused by the coronavirus pandemic.

He noted that prior to the oil price decline, the Nigerian economy was already fragile and vulnerable, with sluggish growth, low revenue to GDP ratio, constrained fiscal space, among others.

According to him, oil and gas represents only about 10 per cent of Nigeria’s GDP, but accounts for about 50 per cent of government revenues and over 90 per cent of export earnings.

The contribution of the power sector to the economy also suffered a decline in Q2.

According to the NBS, the electricity, gas, steam and air conditioning supply sector recorded a year-on-year growth of 8.64 per cent in Q2 2020, down from the 29.75 per cent growth rate recorded in same period of 2019 and 17.51 per cent in Q1 2020.

It said, “The contribution of electricity, gas, steam and air conditioning supply to nominal GDP in second quarter 2020 was 0.92 per cent, higher than the contribution made in the corresponding quarter of 2019 at 0.82 per cent and higher with its contribution of 0.38 per cent in the quarter before.”

“In real terms, however, the sector declined by –3.00 per cent in Q2 2020, a decrease from the growth rate of 0.43 per cent recorded in the same quarter of 2019. When compared to the immediate past quarter, this was a decrease of –0.69 per cent.”

 

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Turning Africa’s Raw Materials Into Wealth: The ARMS 2026 Industrial Agenda

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By Joel Ajayi

For decades, Africa’s vast natural resources have powered industries and economies far beyond the continent, while many African countries have remained largely exporters of unprocessed commodities and importers of finished products.

That familiar pattern is now coming under renewed scrutiny as policymakers, researchers, investors and industrialists seek to change the direction of Africa’s resource economy.

At the centre of that conversation is the second edition of the Africa Raw Materials Summit (ARMS 2026), scheduled for October 19 and 20 at the Abuja Continental Hotel, Abuja, under the theme: “From African Feedstock to African Factories.”

Organised by the Raw Materials Research and Development Council (RMRDC), the summit is being positioned as more than another gathering of policymakers and industry stakeholders. It is intended to provide a platform for confronting the structural challenges that have kept African raw materials largely disconnected from local manufacturing.

Africa has for years operated largely within a “pit-to-port” economic model, exporting raw materials while importing expensive finished products.

Speaking at a press conference ahead of the summit on Tuesday in Abuja, the Director-General and Chief Executive Officer of RMRDC, Prof. Nnanyelugo Martin Ike-Muonso, said the event would bring together policymakers, investors, researchers, technology providers and industrialists to develop practical strategies for transforming Africa’s abundant natural resources into industrial wealth.

The challenge, therefore, is not simply the abundance of resources, but the continent’s ability to transform those resources into industrial value, employment, technology and wealth within Africa.

Nigeria alone, according to the RMRDC, has more than $582.4 billion in documented non-renewable natural resources, while the wider continent possesses substantial deposits of critical minerals, agricultural raw materials and industrial feedstock.

Yet, the benefits of this resource endowment have often been constrained by inadequate processing capacity, weak infrastructure, limited technology, financing gaps and fragmented regional value chains.

From Dialogue to Industrial Action

ARMS 2026 builds on the maiden edition held in May 2025, which attracted more than 1,000 delegates from across the world.

The inaugural summit also witnessed the unveiling of the Ten-Year Raw Materials Transformation Roadmap (2025–2034) by the Minister of State for Industry, Senator John Owen Enoh.

The roadmap was designed around areas including technological capability, climate-resilient processing and backward integration, establishing a policy framework for greater domestic utilisation of Africa’s raw materials.

The second edition is expected to move the conversation further by bringing policy, capital, technology and industrial stakeholders around practical mechanisms for turning raw materials into locally manufactured products.

One of the major proposals highlighted by the RMRDC is the 30 per cent Mandatory Value Addition Bill, which seeks to establish a statutory minimum level of value addition to Nigerian raw materials before export.

The Council says the proposed framework could support job creation, import substitution, foreign-exchange conservation and increased manufacturing contribution to the economy.

Building the Infrastructure for Value Addition

The industrial transformation envisaged by ARMS 2026 goes beyond legislation.

A major concern is the “missing middle” between where raw materials are produced and where factories are located.

Poor transportation networks, inadequate cold-chain facilities, weak rural roads, limited testing and certification infrastructure and border-related delays can make locally sourced materials more expensive and less competitive.

Consequently, logistics and infrastructure constitute one of the five principal pillars of the summit.

The objective is to develop more reliable corridors connecting farms and mines with processing centres and manufacturing facilities, thereby reducing losses and improving the movement of industrial inputs.

The Digital Dimension

Technology is also becoming an important part of the Council’s strategy.

The RMRDC says it has developed the Nigeria Integrated Information Statistical System for Raw Materials and Products (NISSRAMP), described as a digital repository containing information on feedstock deposits, specifications, production outputs and industrial absorption rates.

The Council has also highlighted its transition towards paperless operations and its certification as a Data Controller/Processor of Major Importance by the Nigeria Data Protection Commission.

Such digital infrastructure could provide investors and manufacturers with better information about the availability and characteristics of raw materials while supporting more informed industrial planning.

Turning Waste Into Industrial Inputs

Another major component of ARMS 2026 is the proposed expansion of the circular economy.

The summit will examine how agricultural by-products, mine tailings, scrap metals and biomass can be recovered and reused as inputs for new production processes rather than being treated simply as waste.

The RMRDC argues that such an approach could lower raw-material costs while supporting more sustainable and climate-resilient manufacturing systems.

For Africa, where industrial expansion must increasingly balance economic development with environmental considerations, waste industrialisation could become an important part of the continent’s manufacturing conversation.

From National Production to African Value Chains

The African Continental Free Trade Area is another important element of the summit’s agenda.

The RMRDC sees AfCFTA as an opportunity to create regional value chains in which raw materials sourced in one African country can be processed and supplied to manufacturers in another.

Under such a model, Africa would move beyond simply exporting commodities to external markets and develop stronger internal networks for supplying chemicals, refined minerals, agricultural inputs and other industrial materials across national borders.

This approach places regional integration at the heart of Africa’s industrialisation strategy.

Bridging Research and Capital

A recurring weakness in many developing economies is the gap between research and commercialisation.

Innovations may emerge from universities, research institutions and laboratories without receiving the financing, equipment or market connections required to become commercially viable.

ARMS 2026 intends to address that gap through technology commercialisation and capital linkages, connecting research outputs with investors, development finance institutions and industrial off-takers.

The RMRDC has also cited partnerships with the Bank of Industry for commercial-scale post-harvest processing and a South-South technology-transfer partnership with the National Innovation Centre par Excellence in Shanghai, China.

A Larger Industrial Conversation

The scale of ARMS 2026 is expected to be significantly larger than the maiden edition.

The organisers project more than 1,800 delegates from all 54 African countries and global industrial partners.

The programme will feature high-level policy dialogues, technical panels, an advanced raw materials and technology exhibition, industrial site visits and the African Raw Materials Industry Awards.

The exhibition, in particular, is expected to showcase locally fabricated processing machinery, advanced domestic materials, green chemicals and engineered commercial inputs.

Beyond the speeches and exhibitions, however, the real significance of ARMS 2026 will ultimately depend on what happens after the summit.

Africa’s challenge has never been a shortage of raw materials. The more difficult question has been how to transform those resources into factories, products, skilled employment, technology and sustainable economic opportunities.

For Nigeria and the rest of the continent, the proposed shift from “pit-to-port” to “feedstock-to-factory” therefore represents a broader debate about the future structure of African economies.

ARMS 2026 seeks to place that debate firmly on the industrial agenda — with value addition, technology, finance, infrastructure, circular production and regional trade at the centre.

If the commitments and partnerships generated by the summit translate into measurable industrial activity, the event could provide another platform for Africa to examine how its enormous resource base can support stronger domestic manufacturing.

The message from the organisers is clear: the continent’s raw materials should not only leave African soil as commodities; they should increasingly become the foundation for African industrial production

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