9 November 2017

Nigeria: 2018 Budget - GDP Growth Target, Oil Output Unrealistic Says Expert

A financial expert, Dr Uche Uwaleke says the Federal Government Gross Domestic Product (GDP) figure of 3.5 per cent and oil output benchmark of 2.3 million barrels per day in the 2018 budget is unrealistic.

Uwaleke, the Head of Banking and Finance Department, Nasarawa State University Keffi, said this in an interview with the News Agency of Nigeria (NAN) in Lagos on Thursday.

He said that the proposed GDP growth figure and oil output benchmark appeared ambitious going by the present realities.

Uwaleke said that oil output would depend on the level of peace in the Niger Delta region.

According to him, this can only be achieved through continuous engagement with the stakeholders from the region.

He, however, said that the crude oil price benchmark of 45 dollars per barrel was realistic judging from forecasts by the U.S Energy Information Administration.

Uwaleke added that the crude oil benchmark was achievable on the back of current strong crude oil demand, reduced oil drilling activities in the U.S and output cut agreement between OPEC, Russia and other non oil producing countries.

"The exchange rate of N305 to the dollar is in line with the government's Economic Recovery and Growth Plan and I also think it is in order," he said.

Uwaleke added that the inflation target of 12.4 per cent was realistic considering the fact that headline inflation had been trending downwards since Feb. 2017, partly on account of improved liquidity in the foreign market and stability in exchange rate.

The financial expert also stressed the need for early passage of the budget to achieve the desired result in the interest of the economy.

NAN reports that President Muhammadu Buhari on Nov. 7 in Abuja presented about N8.612 trillion as the 2018 Appropriation Bill to a joint session of the National Assembly, saying the projected expenditure would drive rapid economic recovery.

The budget was 16 per cent higher than 2017 and is based on projected oil output, including condensates of 2.3 million barrels a day at 45 dollars per barrel, using an exchange rate of N305 per dollar.

The government forecast economic growth of 3.5 pe cent in 2018, according to Buhari's presentation.

He said the government would continue to develop infrastructure and increase investments in agriculture to attain food security and reduce importation.

He added that while the Federal Government was committed to identifying alternative means of funding new projects, there was the need to continue to pursue public private partnership to provide more infrastructure in the country.

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