Nigeria Maintains Oil-Revenue Forecast Despite Output Decline

LAGOS, Nigeria, Capital Markets in Africa: Nigeria maintained revenue forecast for this year’s budget based on daily oil production of 2.2 million barrels despite output falling over the past month, reaching a 20 year low currently.

The government of Africa’s biggest economy is keeping price assumptions at $38 per barrel, Budget Minister Udoma Udo Udoma told reporters in the capital, Abuja, on Thursday.

Nigeria recently dropped to second place behind Angola as Africa’s largest oil producer following a resurgence in militant attacks and leaks in the nation’s oil-producing Niger River delta region. Damages inflicted on oil infrastructure run by companies including Chevron Corp. and Royal Dutch Shell Plc have “massively diminished” income, according to oil minister Ibe Kachikwu who said Thursday production was standing at 1.4 million barrels per day.

Budget minister Udoma presented details of Nigeria’s biggest ever budget of 6.1 trillion naira that President Muhammadu Buhari signed into law last week. The budget gap, equivalent to 2.14 percent of gross domestic product, will be plugged with foreign and domestic borrowing. “The 2016 budget will be supported by other fiscal, monetary, trade and investment policy actions that will facilitate accelerated growth and sustainable development,” Udoma said.

Nigeria’s revenue is estimated at 3.85 trillion naira and corporate tax at 1.88 trillion naira in this year’s spending plan, Udoma said.

Growth of Nigeria’s economy already reeling from a drop in crude prices is forecast by the International Monetary Fund at 2.3 percent this year.