Looks like Nigeria’s economy will make leap of 5.5 percent unlike the earlier predictions of 6.4; this is due to lower oil revenues.
As of now a barrel of oil costs $65from $77.50. This, according to the Minister of Finance Ngozi Okonjo, has brought down the revenue from 4.3 trillion naira ($23 billion) to 3.6 trillion naira.
As a result of this the production forecast for oil was set at 2.27 million barrels per day, down slightly from this year’s assumption of 2.38 million.
Oil only accounts for about 15 percent of the GDP of Africa’s biggest economy, but it makes up 75-80 percent of government revenues. Government finances have been hammered by a near halving of world oil prices since June last year.
“The budget seeks to protect the average Nigerian and you know that the key is that we focus on diversification of the economy,” said the Minister. “This budget points to the fact that this country is a non-oil country and I think we want Nigerians to begin to think of the country in that way.”
Yet efforts to diversify over the years have had mixed results, and oil dependency is seen as the Nigerian economy’s biggest systemic flaw.