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Nigeria said Wednesday it plans to produce 1.88 million barrels of crude oil a day for the next year and that the budget will be based on the reference price of $ 57 a barrel.
Africa’s most populous country has been hit hard by the coronavirus pandemic, uncertainty and a collapse in global oil prices that are critical to its oil-dependent economy.
The government announced on Wednesday that a Senate committee had approved spending plans for the next three years, known as the Medium Term Expenditure Framework (MTEF), which forecast GDP growth of 4.2 percent and inflation of 13 percent in 2022.
The House of Lords also nodded for the daily crude oil production of 1.88 million barrels per day (mbpd) for the next year, 2.23 mbpd for 2023 and 2.22 mbpd for 2024 “given an average of 1.93 mbpd in recent years” .
Those numbers are an increase from 1.47 Mbpd oil production this year when the budget was based on $ 40 a barrel.
The House of Lords said that “in the medium term, a very conservative benchmark for oil production has been adopted to ensure greater budgetary realism”.
The Senate Committee recommended the MTEF, saying it was “deliberately designed to minimize the negative socio-economic consequences of the undiminished Covid-19 pandemic and other crises characteristic of our country”.
The estimates were scrutinized by the Senate before President Muhammadu Buhari tabled the draft budget for 2021 later in the year.
While economic growth has recovered from the pandemic, insecurity, kidnappings and criminal attacks have increased in the northwest and central states this year, and food inflation remains persistently high.
Annual inflation was 17.01 percent in August, mainly driven by rising food prices.
Nigeria has sought local and external credit to fund its 2021 budget, carry out critical infrastructure projects, fight Covid-19 and address growing insecurity.
Last week, Buhari moved for parliamentary approval for nearly $ 5 billion in additional external credit.
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