Nigeria slashes budget as oil price plummets — officials

ABUJA: Nigeria – Africa’s biggest oil producer – is being forced to tighten its belt because of the slide in oil prices, officials said.

The continent’s largest economy is reviewing its fiscal and monetary policies to deal with the predicted fall in revenues after oil prices fell by a third since June.

Finance Minister Ngozi Okonjo-Iweala said spending plans made on an oil price benchmark of US$78 dollars a barrel for 2015 were being reviewed downward to US$73 dollars a barrel.

Oil prices rose slightly to US$75.82 a barrel for West Texas Intermediate Friday after falling to a four-year low, with Kuwaiti crude selling for US$71.40.

Okonjo-Iweala said the adjustment “will mean a drop in projection in gross oil revenue from 7.287 trillion naira (US$42.6 billion) to 6.833 trillion naira (US$39.9 billion).” More than twothirds of the country’s revenue is derived from oil, she said.

Okonjo-Iweala said the prediction of the country’s oil production of 2.27 million barrels per day remains unchanged but “we are going to see the expenditure of the federal government this time go down from about 4.8 trillion naira to 4.6 trillion naira.” She said oil accounts for 83 per cent of Nigeria’s exports.

“The way we propose to manage the situation is to adopt a basket of measures, fiscal measures on the revenue side and on the expenditure side and this will be complemented by appropriate monetary policies,” Okonjo-Iweala said.

She ruled out printing more money as a way out of the situation, warning of the risk of inflation. — AFP