FG pegs 2018 budget at 2.3m bpd, $45 per barrel, N305/$

To refinance Treasury Bill for $3bn

By Johnbosco Agbakwuru

ABUJA—THE Federal Government, yesterday, approved the 2018-2020 Medium Term Expenditure Framework, MTEF,  and the Fiscal Strategic Paper, FSP, with a commitment to   achieve seven percent growth rate by 2020, in accordance with the Economic Recovery and Growth Plan. ERGP.

This is as the Federal Executive Council, FEC, approved the refinancing of Treasury Bill to $3 billion, which is about N900 billion.

Briefing State House correspondents after the weekly FEC meeting at the Council Chamber yesterday, Minister of Budget and Economic Planning, Udoma Udo Udoma, said the 2018 budget was predicted on oil projection of 2.3 million barrel per day at $45 per barrel.

He said the exchange rate for the 2018 fiscal year was pegged at N305, which was the official amount fixed by the nation’s apex bank, the Central Bank of Nigeria, CBN.

The minister said:  “The Federal Executive Council approved the 2018-2020 Medium Term Expenditure Framework and the Fiscal Strategy Paper. As you know, we have been having extensive consultations in the last few weeks with the governors, members of the public and leadership of the National Assembly about the Medium Term Expenditure Framework, MTEF.

“The highlights of it is that we are committed to to achieving seven percent growth rate by 2020 in accordance with the Economic Recovery and Growth Plan, ERGP.

“Indeed, the MTEFF-FSP is on the economic recovery growth plan. In terms of the trajectory of getting to the seven percent, we have approved a slightly different trajectory in the sense that by next year, our target will be 3.5 percent growth rate in 2018, 2019, 4.5 percent growth rate and in 2020, 7 percent.

“The crude oil projection for next year is 2.3 million barrels per day and we expect it to be broken down to1.8 millions barrels per day, with regular crude and 500,000 barrels per day in terms of condensed crude. And the price we have projected is $45 per barrel.

“We are also committed to raising additional revenue so as to reduce the debt service to revenue ratio. That is part of the policy of this government, to make sure that our borrowing is reduced and to ensure that we keep a reasonable debt service ratio, which will, of course, help to reduce interest rate.”

FG approves refinancing of Treasury Bill for $3bn

Also briefing journalists, Minister of Finance, Mrs. Kemi Adeosun, said government was reducing its borrowing plan with $3 million as a way of restructuring its debt portfolio.

She said FEC gave approval for the refinancing of treasury bills, adding that the $3billion worth of treasury bills would be refinanced into dollars.

Adeosun noted that as the Naira treasury bills matured, government would issue dollar instruments.

She said:  “The memo I presented and was approved, is part of our effort to restructure our debt portfolio. As you all know, we got an approval in June to restructure our debt and borrow less in Naira and more in dollars because it is cheaper and we want to create room for the private sector to borrow, so they will be able to create jobs.

On his part, Minister of Communications, Adebayo Shittu, said FEC approved the national ICT infrastructure backbone project.

He said:  “It is popularly called NIT2 and it is domiciled within the galaxy backbone limited. It is a federal government-owned agencies, which engage in service wide connectivity of all government offices, MDAs across the country.

“There has been NIT 1 project is about 80 per cent complete. Essentially it covers most of the southern states and also had a data center project. NIT2 two is a concluding component of it to ensure that the entire country is fully covered by fiber optic connectivity in the whole of the country.

“One is happy that the China Exim Bank graciously supported Nigeria. They funded phase one and they are funding this phase two. By today’s approval, the Ministry of Finance would enter negotiations for the full implementation of the funding with us.

“The funding will cost $328 million, approximately N100 billion. When concluded, it will not only cover the entire MDAs, it will be enough for commercialization to the private sector, particularly GSM company and other ICT industry. So we know Nigeria will be making a lot of money from this facility when completed.”

 

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