Nigeria’s government has approved a 3-year spending plan, assuming a benchmark oil price of $42.50 per barrel in 2017 and production at 2.2 million barrels a day, the budget minister said on Wednesday.
According to Reuters’ report monitored by Business247 News Online, the budget sees oil production and prices rising each year to 2019, and the naira recovering to settle at 290 per dollar, Budget Minister Udoma Udo Udoma told reporters after a cabinet meeting in Abuja.
“The highlights is that the government intends to intensify efforts in pursuing non-oil driven economy,” he said. “We’ll continue to spend money on roads, rail transport infrastructure, ports and so on.”
Nigeria’s economy has been devastated by low crude prices and attacks in the southern Niger Delta energy hub that have cut oil production from 2.2 million barrels per day to 1.5 million since January in the OPEC member state.
Projections for 2018 and 2019 were $45 and $50 a barrel and output of 2.3 million and 2.4 million, respectively, Udoma said.
He said the government was assuming a rate of 290 naira per dollar. The currency closed at 305.50 on the official market on Wednesday and had hit a record low of 402 naira on the black market during the session. Currency forwards put the naira at 388 to the dollar in 12 months’ time.
The West African country budgeted a record 6.06 trillion naira of expenditure this year, assuming oil production of 2.2 million barrels per day at a price of $38 a barrel.
But with low oil prices, the government has struggled to fund the budget. It is now seeking advisers to manage a $1-billion eurobond it intends to offer this year.
Udoma forecasted economic growth rates of 3 percent for 2017, 4.6 percent for 2018 and 4.4 percent for 2019, up from a contraction of 0.4 percent in the first quarter of 2016.
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