Nigeria 2018 budget – govt won’t meet 2.3 million bpd production target due to sabotage – fbn – allafrica.com natural gas in spanish

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FBNQuest emphasised that on the basis of the expected further rise in crude output, to an average of 2.07mbpd, from the previous year’s 1.90 mbpd, it predicted a GDP growth of 2.4 per cent this year. Besides, the investment banking firm stated that it saw the non-oil economy in "better shape" in the second half of this year, marked by less restricted household budgets.

Stating that its call for 2018 would not be complete without a view on the naira exchange rate, FBNQuest stated, "The CBN’s unorthodox FX policies, which were first outlined in a circular in February 2017, have exceeded expectations (including its own)."

According to the firm, "On the parallel market, the naira has appreciated from south of N500 per US dollar at the start of 2017 and has settled at about N362 for nine months. It is now rarely quoted in the local media. FX is widely available for manufacturers, services sector operators and retail. There is a spring in the collective step of the CBN and we do not expect an adjustment/unification ahead of the elections. It suits the authorities to have a rate for priority transactions and the internal, and much of the external pressure for unification of rates has eased."

On the plans for the industry bill, FBNQuest said, "We have argued that the institutional agenda of the assembly acts as a brake on development. This was made in the context of the budget process but applies to the Petroleum Industry Governance Bill (PIGB) (formerly the Petroleum Industry Bill (PIB)) equally. Vested interests in the industry have played their part in the delays in its passage. The current administration is opposed to an ‘omnibus’ bill for the industry on the grounds that it has proved too contentious, and so has favoured the passage of the bill in smaller components. In January, both houses of the assembly passed a governance bill, which awaits the signoff of the president.

"The Senate president said earlier this month that he hoped the three remaining components (covering fiscal and administrative issues, and host communities) would be passed before the start of the assembly’s long summer recess in July. This strikes us as an optimistic timeline. The administration has its clear plans for the industry."

FBQuest argued, "The administration will be judged on its fiscal performance because it has pushed an expansionary agenda with ambitious capital spending plans (when governments in Ghana, Angola and elsewhere in similar circumstances have opted for austerity). The expansionary budgets are the FGN’s contribution to returning Nigeria to solid per caput growth. The aim is to boost capital expenditure on the infrastructure and so remove many of the well-documented roadblocks to inclusive growth and job creation. "

It recalled, "The robust GDP growth through to 2014 was based in expenditure terms on robust household demand. Consumption growth has slowed dramatically as a result of the direct and indirect impact of the slide in the oil price, insecurity in the North-east, and currency devaluations (in November 2014, February 2015 and June 2016)."