More trouble for Nigeria’s 2019 budget as oil price slides to $53

The implementation of the 2019 budget presented recently to the National Assembly by President Muhammadu Buhari has continued to face increasing threats as oil prices dropped further yesterday, nearing their lowest level this year.

The global stock markets also declined after they came under pressure from concern about a United States government shutdown and a worsening world economy. As investors flocked to perceived safe-haven assets such as gold and government debt, at the expense of crude oil and stocks, Brent crude futures were down 58 cents at $53.24 per barrel. Also, the US crude futures fell 90 cents to trade at $44.69.

Global benchmark crude had hit this year’s high of $86 per barrel in October before it slumped to $53 yesterday. With oil at $53 per barrel, the implementation of Nigeria’s 2018 budget is under threat as the N8.8trillion budget was predicated on oil price of $60 per barrel.

The Economic Recovery Growth Plan (ERGP) had proposed $50 for the 2019 budget but this was ignored as oil price hovered around $80 during the budget preparation. The federal government also predicated the budget on the 2.3 million barrels per day even though the current output is still around two million barrels per day.

Source: THIS DAY

 

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