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Tag: Budget Minister

  • Pressure on 2025 budget as crude oil price drops to $60 per barrel

    Pressure on 2025 budget as crude oil price drops to $60 per barrel

    Nigeria’s 2025 budget came under further pressure yesterday as the price of Bonny Light crude oil grade dropped to an average of $60 per barrel from $65 per barrel in the international market, yesterday.

    The execution of the budget was benchmarked on $75 per barrel and more than two million bpd output including condensate.

    Nigeria’s budget is funded largely from crude oil revenue.

    In its latest Monthly Oil Report, the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, said Nigeria’s March 2025 oil output, including condensate dropped marginally to 1.6 million bpd from 1.7 million bpd in February, showing more than 300,000 bpd below the budget benchmark.

    Checks by Vanguard indicated that the international oil market was negatively impacted due to increased production and export from many nations even as the Organisation of Petroleum Exporting Countries, OPEC, and its allies, popularly known as OPEC+ move to phase-out their voluntary oil output cuts by ramping up output in May with additional 411,000 barrels per day output.

    In a telephone interview with Vanguard, yesterday, the Chief Executive officer of Petroleum Price NG, Olatide Jeremiah, said: “We are witnessing a major drop in crude oil prices, expected to affect the implementation of the nation’s budget.

    “The downstream has also been impacted. After the holiday, oil marketers would likely reduce depot prices of petroleum products if the situation remains unchanged.”

    Chief Executive Officer, CEO, Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, Farouk Ahmed, recently said: “As consumers, we are happy that the price is coming down, but as a nation, it’s not good for our economy because our revenue inflow is also impacted.

    “Most importantly, what is even destabilising the market is the inconsistencies in the way President Trump sends his policy signals. He moves today. Tomorrow, he reverses. So, it’s been challenging to predict the next level”.

  • Why we are running expansionary spending – Budget Minister

    Why we are running expansionary spending – Budget Minister

    Amidst concerns over increases in budget size and deficits, the Federal Government has indicated that it prefers expansionary fiscal policy which entails huge budget deficits and debts as against a balanced budget.

    Giving this indication in a media chat yesterday in Lagos, Minister of Budget and Economic Planning, Senator Abubakar Bagudu, said the government had considered the expansionary budgetary system as the key to driving economic development.

    He explained that many other economies with the same population range as Nigeria’s were driven by similar budgetary systems.

    He also noted that such economies including Brazil and Indonesia are now far ahead of Nigeria with their budgets in excess of 200 times that of Nigeria.

    Justifying the further increases in the expenditure budget following the expected increase in revenue, Bagudu described Nigeria’s 2025 budget as ambitious, explaining that President Bola Tinubu wanted to challenge his team with aggressive developments in infrastructure and growth in the real sector.

    Recall that despite concerns over the initially N49.7 trillion budget for 2025 considered too large, President Bola Tinubu wrote to the National Assembly requesting for an additional N4.5 trillion increase to bring the final budget size to N53.2 trillion while sustaining the deficit size at N14 trillion.

    Though the President had said the increase was necessitated by expected increase in revenue, many financial experts argued that the expected increase should have been applied to funding and narrowing the deficit, instead of relying on borrowing.

    However, Bagudu stated: “deploying the expected revenue increase to debt servicing is just an option available to the government but the need to expand the economy as quickly as possible is more important than paying off debt because if you expand the economy you collect more taxes and increase revenue to fund a sustained economic development.”

    He added, “for a country that is under pressure for investment we need more investments to go into those areas of the economy that have been underperforming.

    “Part of the crisis we are confronting now is the realization that we have been under-investing in almost every area of our national economy and services; that’s also why our police, security services do not have enough equipments and do not have enough personnel, our roads, our schools and so on”.