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Nigeria's 2017 budget threatens by slide in global oil price
The Nigerian Senate promised to pass the document next week, but the recent drop in oil price is a threat to its full implementation and goal of taking the country out of recession.
Dr. Ibe Kachikwu, Minister of State for Petroleum Resources
Information from Bloomberg reports indicated that global oil price dipped by 9.3 per cent this week, sliding to the lowest since November 15, two weeks before the OPEC signed a six-month deal to curb production aimed at easing a global glut.
The situation is alarming for Nigeria, whose 2017 budget was benchmarked at $44.5 a barrel and 2.2 million barrel a day production level. Though, the document has been passed by the nation’s parliament, while actualization of the revenue assumptions has been a subject of controversies since the budget presentation in December 2016.
Current realities of the global crude oil market, however, show that oil prices may fall below $45 per barrel as OPEC deal loses steam to US oil output. A major factor identified by Analyst for this recent drop in price.
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According to data from the Energy Information Administration, United States’ crude production rose to 9.29 million barrels last week, the highest level since August 2015.
Dr. Ibe Kachikwu, Nigerian Petroleum Minister, indicated during the week that the country will be pushing to prolong the OPEC output cut deal for another six months.
Also, the Comptroller General of Nigeria Customs Service (NSC), Col. Hammed Ali (rtd), reported a total collection of N720.7 billion for the fiscal year ended December 2016, which represents a 23% drop from the N937 billion targeted for 2016.
With the current low business outlook in Nigeria and high import tariffs of the NCS, the performance of the agency is expected to below its N278bn target for the current year.
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