Nigeria has cut its growth forecasts to 2.5 percent in 2017 from an initial projection of 3.02 percent , according to Budget and National Planing Minister, Udo Udoma. He made this known to lawmakers in the Abuja.
Nigeria’s economy shrank by 2.2 percent in the third quarter, according to a recent report by the National Bureau of Statistics(NBS). The IMF forecast test economic output will contract by 1.7 percent, the worst recession in 25 years.
Critics believe growth may not return next year if the government continues with some of its economic policies that have crippled economic activities in the country.
Federal government has presented a N7.3 trillion budget to the National Assembly, which is 20 percent higher than last year. It plans to borrow to plunge a N2.2 trillion budget deficit.
Nigeria’s total domestic debt topped about N10.6 trillion as at June 2016.
Nigeria’s 2017 budget is based on crude-oil production of 2.2 million barrels a day at $42.50 each, and assumes an exchange rate of 305 naira per dollar.
Nigeria has been struggling with a sharp drop in the price of oil since mid 2014 and a severe dollar shortage.
The dollar scarcity hindered companies from importing raw materials and machine. Consequently, a lot of firms had to scale back on expansion plans while some shed jobs in order to cut costs and stay afloat.
Foreign investors fled as they fret that a sudden devaluation of the currency could lead to loss of significant investment.
