ABUJA, AUGUST 24, 2016 – The federal government says it intends to use a crude oil price of $42.50 per barrel as benchmark for budgeting in 2017.
According to Udo Udoma, minister for budget and national planning, who was briefing the media in Abuja on Wednesday after the federal executive council meeting, provision has also been made for a drop in Nigeria’s gross domestic product (GDP) ahead of the 2019 election year.
Udoma said his ministry had prepared the 2017 appropriation bill based on the zero-budgeting system, with focus on critical infrastructure and continued diversification.
“We intend to devote even more resources to critical infrastructure projects just as we did this year. So we will continue to spend more on roads, rails, transport infrastructure, ports and so on,” he said.
“We intend to focus on plane governance and security and we intend to maintain the zero-based budgetary approach. Let me share with you some of the key parameters and assumptions which will be underpinning the 2017-2019 MTEFF.
“Oil price benchmark, we intend to use $42.50 as a reference price in 2017. We are projecting $45 in 2018 and $50 in 2019. So we are keeping to the very conservative in terms of the reference prince of crude oil even though we are expecting it to go higher than this but we are keeping to an extremely conservative price scenario.”
“In terms of oil production, we are keeping to the same level of this year for 2017 and that is 2.2 million barrels per day. For 2018 2.3 million barrels per day, for 2019 2.4 million barrels per day.”
Speaking on GDP growth, Udoma said: “In terms of growth rate, we are targeting in 2017 a three per cent growth rate, 2018 a 4.26 per cent growth rate and 2019 a 4.04 per cent.
“The reason 2019 is slightly lower than 2018 is because that is an election year and usually in an election year there are uncertainties; we have also made provision for that.”
Okechukwu Enelamah, minister of trade and investment, who also spoke at the briefing, said the council approved the ratification of the World Trade Organisation (WTO) Trade facilitation agreement.
“This is an agreement that was approved by all the members of WTO in the ministerial conference that was held in 2013. What that agreement seeks to do is basically to lower the cost of trade generally for everybody,” he said.
“There was a clear understanding that everybody benefits from lowering the cost of doing trade, it is particularly beneficial to developing countries that want to be able to access the international market.
“Nigeria was one of the countries that approved the agreement then and we have been going through the process to ratify the agreement so that it will come into effect.”
