In the ‘IMF Executive Board Concludes 2015 Article IV Consultation with Iran’ report,the body revealed that oil price may reduce by between $5 to $15 by 2015.
If this actually happens, it spells great doom for Nigeria. The 2016 budget is out and the Federal Government of Nigeria with $38 per barrel the price benchmark for crude oil sale next year. If the price of crude oil falls, there won't be any buffer for the budget.
Crude oil makes up about 90% of the nation's foreign exchange earnings. Nigeria is expected to produce 2.2 million barrels
of crude oil per day in 2016. If it sells at $38 per barrel, it will
generate around $83.6m daily or $30.51bn in the entire year.
At $20 as
predicted by the IMF, Nigeria will generate $44m daily or $16.06bn next
year. This will mean that the country will get at least 47.4 per cent
less revenue from oil than what is projected, adding more pressure to
the nation’s need to go borrowing in 2016.
According to President
Muhammadu Buhari, oil related revenues are expected to contribute
N820bn to the economy, while the budget deficit, which is projected at
N2.22tn, will be funded by foreign and domestic loans.
If the
N820bn expected from oil revenues is cut by 47.4% as a result of
the IMF projected decline in oil prices, the nation’s budget deficit
will climb by N388.68bn to N2.59tn.
This is another 'not so good news ' for Nigerians
Source: http://www.punchng.com/oil-could-fall-to-20-in-2016-imf/
No comments:
Post a Comment