26 May 2014, Lagos – Nigeria’s budget deficit is now 1 per cent of GDP following a rebasing of its gross domestic product (GDP) from 1.9 per cent, the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, said in a statement, after President Goodluck Jonathan signed the budget for 2014.
Jonathan signed the N4.64 trillion budget late on Friday.
The budget was passed in April, despite earlier threats by the main opposition All Progressives Congress (APC) to block it in the National Assembly.
Nigeria recalculated its GDP last month, which pushed it ahead of South Africa to become Africa’s top economy. The new figure also shrank Nigeria’s debt-to-GDP ratio to 11 per cent for 2013, against 19 per cent in 2012.
The Nigerian economy is attracting growing interest from foreign investors, although they worry about the government’s tendency to squander its oil revenue as well as mounting security challenges like a deadly Islamist insurgency that has killed thousands in the North-east and which hit the capital Abuja twice last month, reported Reuters.
Most governments revise their GDP calculations every few years to reflect changes in output, but Nigeria had not done so since 1990, so sectors such as e-commerce, telecommunications and the country’s prolific “Nollywood” film industry had to be factored in.
The 2014 budget assumes oil earning at $77.5 a barrel and production of 2.388 million barrels a day.
The price assumption is seen as conservative, whereas the output assumption is seen as over optimistic due to frequent production shut ins caused by oil theft and vandalism of oil industry infrastructure, economists say.
– This Day