News Analysis: Rising Oil Price Raises Hope of a New Dawn … As Buhari Presents N8.61 Trillion Budget of Consolidation

Dipo Kehinde/

Are you wondering why there was a smile on the President’s face today as he presents the 2018 appropriation bill?

This is probably the reason why: President Muhammadu Buhari has suddenly found the strength to ride the stumble out of Nigeria’s horse today.

He told the National Assembly that he was very pleased today as he presents a princely N8.61 trillion appropriation bill for 2018 fiscal year, which he called Budget of Consolidation. The budget is 16 per cent higher than that of 2017.

Although he didn’t reveal it, the President’s pleasant outlook was flowing from the fountain of the crude oil price that has just hit its highest in 2 ½ years today.

The 2018 budget is based on the crude oil benchmark of US$45 per barrel with an estimated daily production of 2.3 million barrels. But oil price shot beyond $61 per barrel today.

OPEC Basket stands at $61.05 today. This is good news for Nigeria, the oil-producing nation that has not been able to adequately finance its budget in the last two years.

The increase in oil price and the 0.45 growth in the non-oil sector appear to have reassured the President that efforts towards capacity building and infrastructure development would not be in vain.

NewsmakersNG learnt that the oil price is rising, in part, because of Saudi Arabia’s constant barrage of production-cut rhetoric. The kingdom has been insisting in its latest publicity blitz that OPEC would maintain its production cuts.

Experts say this has resulted in the rising oil price.

Buhari mentioned that friends and partners in the Joint OPEC/Non-OPEC Ministerial Monitoring Committee (JMMC) graciously granted Nigeria an exemption from the output cuts imposed on OPEC member countries in January 2017, and extended in September 2017.

He said that the exemption “significantly helped during our most challenging time”.

Buhari presented the budget before the joint session of the Senate and House of Representatives.

He told them that the budget was based on an exchange rate of N305 to one dollar.

The budget expenditure is made up of N2.41 trillion for capital and the N3.49 trillion for recurrent.

At the presentation, the President received a chorus of applause from the lawmakers. He described the budget as that of “consolidation’’ and gave the hope that 2018 would be a better one.

The budget, he said, was prepared and dedicated to the country’s economic recovery and growth.

He, however, appealed to militant groups in the oil-rich Niger Delta not to revert to violence or engage in destruction of oil and gas facilities that could reverse the expected fortune. The militants served the government notice at the weekend that they were ready to start blowing up oil pipelines in their region.

Buhari said that dialogue was the key to ensuring peace and development.

“We must come together to address our grievances. Threat and violence is not the way out,’’ he said.

Buhari also appealed to members of the National Assembly to threat the budget estimates with all seriousness, so that the country could revert to its January to December fiscal year.

He added that he had directed that the military and other agencies should be enrolled in the Integrated Payroll of Personnel Information System (IPPIS) for the purpose of paying their salaries centrally to eliminate ghost workers.

Read the full presentation of President Buhari here: http://www.newsmakersng.com/2017/11/07/buhari-delivers-2018-budget-of-consolidation-to-national-assembly/

 

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