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Nigeria forced to revise budget as oil prices remain low | Nigeria forced to revise budget as oil prices remain low |
(35 minutes later) | |
Nigeria has been forced to revise its budget following the dramatic fall in the price of oil. | Nigeria has been forced to revise its budget following the dramatic fall in the price of oil. |
Its finance minister, Ngozi Okonjo-Iweala, says its economy will now grow at 5.5% this year, rather than 6.4%. | Its finance minister, Ngozi Okonjo-Iweala, says its economy will now grow at 5.5% this year, rather than 6.4%. |
The new budget is based on an oil price of $65 a barrel, rather than the previous assumption of $77.40, although the revised figure is still higher than the recent level of about $60. | The new budget is based on an oil price of $65 a barrel, rather than the previous assumption of $77.40, although the revised figure is still higher than the recent level of about $60. |
Nigeria's government receives more than 75% of its revenues from oil exports. | Nigeria's government receives more than 75% of its revenues from oil exports. |
The country is trying to reduce its dependence on oil. | |
Prices have steadily dropped in recent months and are now about half their previous levels. | |
Falling demand on the back of slackening economic growth and an increase in alternative energy supplies, such as shale gas, have led to a mismatch between supply and demand. | Falling demand on the back of slackening economic growth and an increase in alternative energy supplies, such as shale gas, have led to a mismatch between supply and demand. |
'Fast' | |
Dr Okonjo-Iweala urged Nigerians "to begin thinking of the country [as] a non-oil country". | |
Nigeria has taken some key steps already in response to the falling oil price, which is at its lowest level since July 2009. | |
It has devalued the naira and has applied higher taxes on luxury items. | |
Dr Okonjo-Iweala said: "This budget is based on a few key indicators, $65 a barrel benchmark and we are going to stick to it for now, in spite of the decline in prices, because we feel the average price next year will be around $65 to $70. | |
"The production level is 2.27 million barrels per day. We've revised the growth rate based on the new parameters for the country, down from 6.35% to 5.5% next year. But that is still one of the fastest growth rates we're experiencing in the world today." | |
Nigeria's currency, the naira, lost 3.5% on the day, hitting a record low of 187.10 to the dollar. | Nigeria's currency, the naira, lost 3.5% on the day, hitting a record low of 187.10 to the dollar. |
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