According to IMF, Nigeria economy is expected to shrink by 1.7% for all of 2016 as a result of price and output of oil, shortages of power and foreign currency, and delayed passage of this year’s budget meant to stimulate the economy. This will be the first full-year contraction in 25 years.
West Africa’s biggest economy will probably grow by 2.5 percent compared with an earlier projection of 3.02 percent, Udoma (National Planning Minister) told lawmakers in the capital, Abuja on Tuesday. “We realized that it is not achievable due to the current economic recession,” he said.
On Wednesday 14th December, 2016, the Nigerian President Muhammadu Buhari proposed a budget of 7.3 trillion naira ($23 billion) termed “budget of recovery and growth” for 2017 to lawmakers which is based on crude-oil production of 2.2 million barrels/day at $42.50 per barrel, and assumes an exchange rate of 305 naira per dollar.
The 2017 budget represents a 20 percent increase from this year’s spending plans.
The government intends to borrow 2.32 trillion naira (foreign debt) to plug next year’s budget deficit,and also plans to issue promissory notes of 2 trillion naira in 2017 for liabilities.