MTEF: FG okays 42 dollars oil benchmark for 2017 budget …Pegs exchange rate at N290 to $1

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By; SUNDAY ODE, Abuja.
The Federal Executive Council (FEC) on Wednesday approved the 2017 to 2019 Medium Term Expenditure Frame (MTEF) which recommended that the 2017 budget be predicated upon oil price benchmark of 42 – 50 dollars par barrel and N290 exchange rate to a dollar.
Minister of Budget and National Planning, Udoma Udo Udoma who stated this while briefing State House Correspondents after a regular meeting of FEC presided over by President Muhammadu Buhari, said the document would consequently be transmitted to the National Assembly for necessary legislative action as the next three budgets would derive from it.
According to him, the MTEF, which was adopted after wide consultation with important stakeholders, highlighted the need for the Federal Governnemt to sustain its efforts at diversifying the economy as well as creating the enabling environment for business to thrive.
He said: “The Federal Executive Council meeting approval of the Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (SFP) for 2017 to 2019.
“As you know, the Fiscal Responsibility Act requires the executive to prepare the MTEF and send it on to the National Assembly for their consideration.  And it is on the basis of the MTEF that the next budget will be fashioned.
“So, in short, we have started the process of preparing the 2017 budget.
“Before the MTEF was presented to FEC for consideration, there was an extensive consultation with the private sectors, governors, NGOs.
“In the 2017-2019 MTEF, the government intends to intensifies efforts in pursuing manpower driven economy. So we intend to intensify effort to diversify the economy, we intend to go on with the implementation of ongoing reforms in public finance, we intend to enhance the environment for ease of business so as to generate private sector and private investment.
“Let me share with you some of the key parameters and assumptions which will be underpinning the 2017-2019 MTEF.
“Oil price benchmark: We intend to use $42 – 50 as a reference price in 2017. We are projecting $45 in 2018 and $50 in 2019.
So we are keeping to the very conservative in terms of the reference prince of crude oil even though we are expecting it to go higher than this but we are keeping to an extremely conservative price scenario.
“In terms of oil production, we are keeping to the same level of this year for 2017 and that is 2.2 million barrels per day. For 2018, 2.3 million barrels per day; for 2019, 2.4 million barrels per day.
“In terms of the currency, we are using the exchange rate, we are using N290 to $1. We believe that the naira will stabilise and we believe that N290 to $1 is a fair estimate from the Central Bank of what the naira is worth.”
The crude oil benchmark in the current budget is 38 dollars while the official exchange rate is N290 to a dollar.
Speaking further, the Minister said government intends to continue to pursue gender sensitive, pro-poor and inclusive social intervention schemes similar to what it is doing in the current fiscal year.
“Our social intervention programmes is going to be sustained. We intend to devote even more resources to critical infrastructure projects just as we did this year.
“So we will continue to spend more on roads, rails, transport infrastructure, ports and so on. We intend to focus on plain governance and security and we intend to maintain the zero-based budgetary approach,” he said.
On the projected growth rate of the eceonomy, Udoma noted that government was targeting “in 2017 a three per cent growth rate, 2018, a 4.26 per cent growth rate and 2019, a 4.04 per cent.”
The Planning Minister explained that “the reason 2019 is slightly lower than 2018 is because that is an election year and usually in an election year, because of the uncertainties we have also made provision for that.”

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