The Federal government resubmitted the 2015-2017 Medium Term Expenditure Framework (MTEF) yesterday with a revised oil benchmark of $65 a barrel. This comes after it was revised about two weeks ago price from $78 to $73, effectively slashing next year’s budget by another 12 percent.

Dr. Ngozi Okonjo-Iweala, the Minister of Finance and Coordinating Minister for the Economy, disclosed the second revision of the 2015 budget benchmark in an interview with THISDAY Tuesday night. She said the new benchmark price of $65 per barrel had been approved by President Goodluck Jonathan and a revised expenditure framework for the next three years was resubmitted on Wednesday to the parliament for its approval.

“So, yes, we have looked at it and we decided that we are going to propose a lower benchmark than what we have. Mr. President has approved a price of $65 a barrel and we are sending a new MTEF to the National Assembly tomorrow,” she said.

Public agencies have been given targets as part of measures to boost revenue for the economy. They have been mandated to deliver 25 percent of their gross revenues to the Consolidated Revenue Fund. The Central Bank of Nigeria (CBN) will be responsible for monitoring the activities of revenue-generating agencies to checkmate remittances.

Oil dependency effect

Alison-Madueke, the country’s Minister of Petroleum Resources and the newly elected President of the Organisation of Petroleum Exporting Countries (OPEC), while speaking to journalists on Wednesday, acknowledged the current challenges associated with falling oil prices.

She said oil producing countries such as Angola and Algeria as well as Nigeria, who all depend heavily on oil for national income, are under pressure to take certain austerity measures. “Angola, Algeria, (and) Iran are all under duress, as is Nigeria, because (the fall in oil prices) has affected our budgetary benchmark. And even non-OPEC countries like Russia, which would not cut production, are already seeing a drop in the value of the rouble.”


http://www.ventures-africa.com/2014/12/a-conservative-2015-nigerias-latest-oil-benchmark-slashes-budget-by-12/