A civic tech organisation, specialising in the transparency of public finance, BudgIT, has described the 2.3 million barrels per day (bpd) oil production estimate as ambitious and unrealistic.
NIGERIA NEWS had earlier reported that the National Assembly on Wednesday approved the 2018 appropriation bill of N9.12 Trillion up from the N8.612tn presented by President Muhammadu Buhari on November 7, 2017.
The Chairman of the Joint Committee on Appropriations, Sen. Danjuma Goje said the Committee based the expenditure of the 2018 Appropriation Bill on the key revenue assumptions of $51 as the benchmark oil price, 2.3million barrels per day (mbpd) as the crude oil production and N305/$ as the exchange rate.
Reacting to the development, the Head of Research at BudgiT, Atiku Samuel, on Thursday noted that the country presently produces about 1.8 million to 2 million barrels of oil per day.
He also explained that the 2.2 million barrels per day estimate, quoted in the 2017 budget was not attained.
“Even in the former proposal, as submitted by President Buhari, we felt that the budget was overly optimistic and ambitious. This is because, in recent years, Federal Government’s revenue has not gone above N3.5 trillion.
“So quoting a revenue of N6 trillion in the 2018 budget is overly ambitious and we feel that it won’t happen, thus financing an N9.12 trillion budget on the back of such revenue is unrealistic.
“Indeed crude oil prices is going up to almost 80 dollars per barrel, and so if the crude oil price is raised to N51 dollars per barrel, it seems okay, but our biggest issue is the oil production numbers.
“Can we produce 2.3 million barrels per day? And the answer is no. We are currently producing about 1.8 million to two million bpd and I don’t see us going above that. Even the 2.2 million bpd quoted in the 2017 budget was never met so I don’t see us doing 2.3 million bpd now,” he said.
Mr Samuel said also, that with the over-hyped nature of the 2018 revenue projections, the capital expenditure component would suffer the most.
“Also, the rainy season is already here, therefore little construction will take place until the end of the year, so this will also affect the capital expenditure framework,” he said.
“Also, we wish to state that the country is spending too much on debt servicing. Even the entire oil revenue of Nigeria cannot service the country’s debt.
“That shows that the government needs to ensure that other variables within the economy begins to pay their fair share of tax,” he said.