Nigeria Cuts 2017 Growth Forecast to 2.5%, Minister Says

  • Economic growth projection down from 3% due to economic slump
  • Government set to propose 7.3 trillion-naira budget for 2017

Nigeria cut its 2017 growth forecast by half a percentage point as the ongoing economic slump slows output, the Budget and National Planning Minister Udo Udoma said.

West Africa’s biggest economy will probably grow by 2.5 percent compared with an earlier projection of 3.02 percent, Udoma told lawmakers in the capital, Abuja on Tuesday. “We realized that it is not achievable due to the current economic recession,” he said.

Nigeria’s economy contracted in the first nine months of this year partly because the price and output of oil, its biggest revenue earner, dropped, and as it suffered shortages of power and foreign currency. These factors and delayed passage of this year’s budget meant to stimulate the economy could cause it to shrink by 1.7 percent for all of 2016, according to the International Monetary Fund. That would be the first full-year contraction in 25 years.

President Muhammadu Buhari is set to propose to lawmakers on Wednesday a budget of 7.3 trillion naira ($23 billion) for 2017, representing a 20 percent increase from this year’s spending plans. The government intends to borrow 2.32 trillion naira to plug next year’s budget deficit, half of which will be from foreign debt, according to Udoma. It plans to issue promissory notes of 2 trillion naira in 2017 for liabilities, he said.

Nigeria’s 2017 budget is based on crude-oil production of 2.2 million barrels a day at $42.50 each, and assumes an exchange rate of 305 naira per dollar, Udoma said.

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