- Economy projected to grow at 3.73 cer cent
Tobi Soniyi in Abuja
The Federal Government has announced that the nation’s economy will grow at an average of 3.73 per cent in the next three years even as it approved the Medium Term Expenditure Framework (MTEF) for 2117, 2018 and 2019.
The Minister for Budget and National Planning, Udo Udoma, who disclosed this on Wednesday in Abuja after the Federal Executive Committee (FEC) meeting presided over by President Muhammadu Buhari, said the economy was projected to grow by 3 per cent in 2017, 4.26 per cent in 2018 and 4.04 per cent in 2019.
The minister said government set $42.50 as a reference price in 2017 for oil and projected it would rise to $45 in 2018 and $50 in 2019.
He said: “Government is keeping to a very conservative in terms of the reference price 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, he said government would retain this year’s estimate of 2.2 million barrels per day for 2017 despite the fact that militancy in the Niger Delta has forced oil production to below one million barrels per day.
For 2018, government remained ambitious and expected production to rise to 2.3 million barrels per day while in 2019 it hoped it would increase to 2.4 million barrels per day.
The minister said: “The Federal Executive Council meeting approved 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 intensify 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 ofdoing business so as to generate private sector investments. We intend to continue to pursue gender sensitive, pro-poor and inclusive social intervention schemes similar to what we did in 2016, 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 governance and security and we intend to maintain the zero-based budgetary approach.
“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 growth rate, we are 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 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 provisions for that.”
Also speaking at the briefing, the Minister of Industries, Trades and Investments, Okechukwu Enelamah said FEC also also approved the ratification of the World Trade Organisation (WTO) Trade Facilitation Agreement.
He explained that the agreement was approved by all the members of WTO in the ministerial conference that held in 2013.
He said: “What that agreement seeks to do is basically to lower the cost of trade generally for everybody.
“There was a clear understanding that everybody benefits from lowering the cost of doing trade, it is particularly beneficial to developing countries that want to access the international market.”