• Forecasts 3 percent growth in 2017, 4.26 percent for 2018
  • The naira is projected to stabilize at 290 to the dollar

Nigeria approved a three-year spending plan targeting modest economic growth as Africa’s most populous country tries to emerge from a revenue squeeze caused by the collapse of the price of oil, its main export, Budget Minister Udoma Udo Udoma said.

The government forecasts the economy to grow 3 percent next year, rising to 4.26 percent in 2018 and 4 percent in 2019, Udoma told reporters in the capital, Abuja, after Wednesday’s cabinet meeting. Oil production is estimated at 2.2 million barrels a day and $42.5 a barrel in 2017, increasing to 2.3 million barrels at $45 a barrel in 2018 and to 2.4 million barrels at $50 a barrel in 2019, he said.

Gross domestic product will probably contract 1.8 percent this year, according to the

“We’re keeping to a very conservative figure in terms of reference price of crude oil even though we’re expecting it to go higher,” Udoma said. “The government intends to intensify efforts in pursuing a non-oil driven economy. We will continue to spend money on roads, rail transport, ports and so on.”

Nigeria, which relies on oil for two-thirds of its revenue and more than 90 percent of foreign-exchange income, saw its economic woes worsen as militant attacks in its southern oil region cut output to the lowest in nearly three decades. The economy contracted 0.4 percent in the first quarter, putting it on course for the first recession in 29 years.

Exchange-rate pressure, which mounted on the naira as foreign earnings dipped, is expected to ease and lead to a stronger currency in the region of 290 per dollar as the plan is implemented, according to Udoma said. The naira closed at 318 to a dollar in interbank trading Wednesday in the commercial capital, Lagos.

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