The Federal Government of Nigeria recently projected key assumptions in running the 2019 budget.
Director-General, Budget Office of the Federation, Mr. Ben Akabueze, rolled out the figures for the key assumptions during a public hearing on the Medium Term Expenditure Framework (MTEF)
The hearing was organised by the House of Representatives Joint Committee on Finance, Appropriation, Aids, Loans and Debt Management headed by Babangida Ibrahim, yesterday, in Abuja.
Akabueze said the 2019 budget is expected to run at nominal Gross Domestic Product, GDP, of 139.65 trillion and 3.01 percent of GDP growth.
He noted that other key assumptions of micro-framework of the budget are based on a projection of 2.3 mbpd oil production, oil price benchmark of $60pb, exchange rate of N305 to a dollar, 9.98 inflation rate and 119,28 trillion nominal consumption.
Similarly, Economic Recovery Growth Plan (ERGP) also projected oil production at 2.4mbpd, oil price benchmark of $50pb, exchange rate of N305 to a dollar, 13.39 inflation rate, 106, 03 trillion nominal consumption, 126, 36 trillion nominal GDP and 4.5 percent GDP growth rate.
“As at the end of 2018, Federal Government aggregate revenue was N3.96 trillion, which is 55 percent of the budget and which is higher than the 2017 revenue,” he said.
While explaining the parameters, he placed oil revenue at N2.32 trillion, 77 percent of budget and 64 percent higher than 2017; Company Income Tax, CIT, of N637, 25 billion, 80 percent of budget and 1.7 percent higher than 2017 and Customs Collection of N303, 91billion, 94 percent of budget and 16 percent higher than 2017.
He added that “Notwithstanding the softening in the international oil prices in late 2018, the opinion of most reputable oil industry analysts is that the downward trend is not necessarily reflective of the outlook for 2019.
‘’Currently, the average Brent oil price projection for 2019 by 32 different institutions with relevant expertise is still about $69/b,’’ he explained.
He mentioned that President Muhammadu Buhari had directed the Nigerian National Petroleum Corporation (NNPC) to take all possible measures to achieve the targeted oil production of 2.3 million barrels per day.
Figures made available by the Central Bank of Nigeria, CBN, have shown that the country’s foreign exchange reserve has hit a six months high at $44.14 billion as at Thursday.
The external reserves have gained over $1.8bn since February 28, when it dropped to its 2019 low of $42.296bn.
The reserves had risen slightly from $43.116bn on December 31, 2018, to $43.174bn on January 31, 2019, only to fall to $42.296bn at the end of last month.
It would be recalled that the external reserves rose to a high of $47.865bn on May 10, 2018. It however plunged to $41.523bn on November 22 from $44.305bn on September 28.
This is coming just as the United States’ President, Donald Trump’s tweet cussed another price upset in the crude oil market.
Trump had on Thursday, called for the Organisation of the Petroleum Exporting Countries to boost oil production to lower the price of the commodity.
“[it is] very important that OPEC increase the flow of oil. World markets are fragile; price of oil getting too high. Thank you!” Trump wrote in a post on Twitter.
Immediately after the tweet, the US crude oil futures fell by more than $1 to $58.33 a barrel and Brent futures were down by more than $1 to a session low of $66.76 per barrel, News reported.
The Nigerian National Petroleum Corporation (NNPC) says severe penalty awaits anyone who default in the procument process in project execution in the corporation.
NNPC Managing Director, Dr Maikanti Baru, also warned management and staff of the corporation against any action that contravened the provisions of the Public Procurement Act in the award of contracts.
He gave the warning on Wednesdsy in Abuja at a Supply Chain Management workshop for NNPC Procurement Managers.
Baru cautioned staff against contract splitting and accumulation, which he described as a deliberate act by procurement managers to subvert due process in the procurement process.
He noted that the corporation was commited to transparency in every aspect of its operations, adding that all procurements and contract awards in the corporation under his watch so far had been carried out in conformity with the Public Procurement Act.
The NNPC boss directed the Supply Chain Management Division to step up its level of monitoring of the various tender boards within the corporation for full compliance.
He commended President Muhammadu Buhari for the early approval of the NNPC budget, assuring that as the chief revenue earner for the nation, NNPC was committed to the economic policies of the Federal Government.
“The whole essence of the next level is to ensure that things are done correctly and speedily for the benefit of the people”, the NNPC boss said in a statement.