Nigeria may propose a total of 8.7 trillion naira budget for its 2020 fiscal year compared with 8.9 trillion naira approved for the current year.
According to the content of the 2020-2022 MTEF/FSP documents present to the National Assembly by the federal government on Wednesday, the 2020 budget would be pegged on $55 per barrel benchmark, while the country is expected to produce 2.1 million barrels of oil per day in the course of the fiscal year.
The 2019 budget was based on 2.3 mbpd, indicating that the government is having a rethink on its projections to rev up crude oil production.
Nigeria, Africa's largest crude producer is currently battered by huge crude oil theft by organised criminals in the Niger Delta, which sources said include some unscrupulous security agents conspiring with international traders.
A report recently by the National Executive Council (NEC) put the total loss to crude oil theft at $1.35 billion in the first six months of the year.
Nigeria is expecting its economy go grow at 2.93 percent in the course of the year 2020, this is short of projection for 2019 which has substantially remained unmet.
Nigeria real GDP increased from 1.89 percent in the first quarter of 2018 to 2.10 percent in the first quarter of 2019, according to minister of finance, budget and planning the strongest first-quarter growth since 2015.
The economy also grew by 1.94 percent in the second of 2019, with half-year 2019 cumulative GDP growth rate is 2.02 percent.
The 2.18 mbpd crude production output projection for the 2020 budget is seen as a more realistic estimate by the finance minister Zanab Ahmed in view of the country's inability to meet previous output projections in the time past.
"Actual daily crude oil production and exports have been well below budget projections since 2013, despite the installed capacity of up to 2.5 mbpd, for a number of reasons.
"For 2018, actual production was 1.84mbpd and for the first half of 2019 it was 1.86mbpd (base production)" the minister said in a recent presentation on the MTEF.
She said the $55/barrel benchmark for 2020 as against $60/b for 2019 was assumed considering the expected oil glut in 2020, as well as the need to cushion against unexpected price shock.
Ahmed said there are strong indications of an oversupplied in the global crude oil market in 2020.
Nigeria is expecting its economy go grow at 2.93 percent in the course of the year 2020, this is short of projection for 2019 which has substantially remained unmet.
Nigeria real GDP increased from 1.89 percent in the first quarter of 2018 to 2.10 percent in the first quarter of 2019, according to minister of finance, budget and planning the strongest first-quarter growth since 2015.
The economy also grew by 1.94 percent in the second of 2019, with half-year 2019 cumulative GDP growth rate is 2.02 percent.
The 2.18 mbpd crude production output projection for the 2020 budget is seen as a more realistic estimate by the finance minister Zanab Ahmed in view of the country's inability to meet previous output projections in the time past.
"Actual daily crude oil production and exports have been well below budget projections since 2013, despite the installed capacity of up to 2.5 mbpd, for a number of reasons.
"For 2018, actual production was 1.84mbpd and for the first half of 2019 it was 1.86mbpd (base production)" the minister said in a recent presentation on the MTEF.
She said the $55/barrel benchmark for 2020 as against $60/b for 2019 was assumed considering the expected oil glut in 2020, as well as the need to cushion against unexpected price shock.
Ahmed said there are strong indications of an oversupplied in the global crude oil market in 2020.
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