Following the surge in crude oil prices in recent months, the Nigerian Minister of Finance Zainab Ahmed on Wednesday said the Federal Government will assume a crude oil benchmark of $57 per barrel for the 2022 budget.
This represents an increase of 42.5 percent from the benchmark of $40 per barrel used in the 2021 budget.
The minister further stated that crude oil production will be projected at 1.88 million barrels per day.
Also, more than about 1.47 million barrels per day being produced by Nigeria due to the OPEC+ agreement.
Global oil benchmark, Brent crude oil, is presently trading at $73 per barrel and could drop if oil giants, Saudi Arabia and the United Arab Emirates, failed to reach an agreement on production cuts and extension.
Ahmed put the expected total spending for 2022 at N13.98 trillion or $34 billion, an increase of 3 percent from the 2021 budget.
Nigeria is an oil-dependent economy that relies on oil exports for over half of its budget and about 95 percent of its foreign exchange.
Nigeria’s limited revenue generation despite its huge market has weighed on the nation’s ability to effectively support economic growth and improve job creation.
The nation’s foreign reserves shed US$179 million in the first five days of July to US$33.144 billion, down from the US$33.324 billion recorded on June 30, 2021.
Struggling to plug its numerous deficits, the Nigerian Senate passed a supplementary budget of N895 billion on Wednesday to plug the deficit in funding for the military in fighting insurgency, covid 19 vaccination, and also funding for the management of HIV.