Nigeria’s N4.93tr Budget Under Threat

• Africcon News
  Africcon Report: Nigeria’s N4.93tr budget under threat
  Africcon New Media – News
  
  From: Africcon Media – Nigeria
  
  Nigeria’s ability to finance its N4.93 trillion 2013 budget may run into a hitch as the Federal Government declared that she was losing N160 billion ($1billion) monthly in revenue following the drop in oil production and in the prices of crude oil at the international market. Total losses, which stemmed from shut-in, due to Force Majeure declared  by oil companies, oil theft and illegal bunkering, were put at 300, 000 barrels per day (bpd) by the Finance Minister and Coordinating Minister of the economy, Dr.  Ngozi Okonjo-Iweala.
  
  Addressing a press conference, at the sidelines of the ongoing World Bank/ International Monetary Fund (IMF) meetings in Washington D.C, the minister said the briefing was important because of the avowed transparency in the President Jonathan’s administration. The Nigerian National Petroleum Corporation (NNPC)  had  said last Tuesday  that oil production fell below projections in the first quarter due to crude theft and pipeline sabotage. The current production, according to Finance Minster, ranged from 2.1 million bpd to 2.2 million barrels per day, less than an estimated 2.5 million barrels per day for the 2013 budget.
  
  The N4.93 trillion ($31.35 billion) budget  for 2013 was based on an assumption of a $79-per-barrel budget oil price, higher than the $75-per-barrel proposed by the Executive and up from $72 for last year’s budget. With the persistent drop in  price of oil in the international market ($97 dollar per barrel as at yesterday), coupled with the monthly N160billion revenue loss, in addition to the shortfalls in other revenues from the  Federal Inland Revenue Service (FIRS) and Nigerian Customs, the ability to finance the 2013 budget may be tough if  oil production is not restored in good time especially the Shell Nembe, which has shut-in 150,000 barrels of oil per day.
  
  But the Minster has assured that the $7billion left in the Excess Crude Account (ECA) was enough to stabilise the shortfall within the next three months pending the time the recoveries would be made. She said this is why the Excess Crude Account (ECA) is very important to the country but pointed out that it was very significant for  the country to move quickly to recover production.
  
  The Federal Government sets a price per barrel when calculating oil revenue in the budget, and saves any money collected above that level in the ECA to meet spending shortfalls. Already, Okonjo-Iweala said President Jonathan has directed the Nigeria Navy to go after the oil thieves and would also be meeting with the oil chiefs next week, with a view to collaborating with them on how to restore the damaged pipelines by the oil thieves as well as finding a lasting solution to the malaise.