Oil prices slash Nigeria GDP growth

Oil prices slash Nigeria GDP growth

2014-12-18 13:51

Abuja - Nigeria's economy will grow 5.5% in 2015, down from an earlier projection of 6.4%, due to lower oil revenues, according to the finance minister.

The naira lost 3.6% on the day, closing at a record low of 187.10 to the dollar, after the central bank said it would hold the last foreign exchange auction of the year on Wednesday, which triggered strong demand from some importers and forex end-users. The currency rarely reacts to budget news.

The 4.3 trillion naira ($23bn) budget rests on a benchmark oil price of $65 a barrel, down from $77.50 in the 2014 budget and a significant cut on previous budgets, said Finance Minister Ngozi Okonjo-Iweala.

The production forecast for oil was set at 2.27 million barrels per day, down slightly from this year's assumption of 2.38 million. The figures were in line with earlier comments by the minister this month.

Oil only accounts for about 15% of the GDP of Africa's biggest economy, but it makes up 75 - 80% of government revenues. Government finances have been hammered by a near halving of world oil prices since June.