afrol News, 20 October - Nigerian government is expected to present a revised budget proposal for 2009 before national assembly in few days, which has further cut on oil benchmark to a lower than expected $45 price per barrel.

Reports from Abuja point that government has been put under pressure from falling oil prices mainly due to global recession and thereby felt that a $45 benchmark could give government enough cushion against eratic price changes. Earlier benchmark was put in proposed budget at $62.5.

Economists though criticising a set lower benchmark, saying expected situation could have been overstated, have however said by preempting markets Nigeria would be able to stabilise and maintain balances throughout 2009.

Government has already announced that most of budgetted money for next financial year will go towards priority projects, and that areas such as international spending on training civil service as well as purchasing of new vehicles may have to be shovelled aside.

With 2008 budget at 1.7 trillion naira (about 14.6 billion U.S. dollars), local media reports have said this year's budget would be much lower.

Federal state officials have also confirmed that downwards revision will look into serious measures to reduce expenditure while at the same time striving to improve efficiency of expenditure.

Officials further added most allocated funds under capital budget would go towards priority areas in food security and production, improvement of power, road transportation and defense sectors, "in line with the seven point agenda of president Yar'Adua administration."

West African economic power's dependency on oil revenue, has also come under a huge challenge, according to analysts, reporting that some 95 percent of Nigeria's exports revenue is from crude sales, while about 85 percent of federal government's annual gains rely on business in oil and gas sector.

Nigeria's projected oil production in 2009 is 2.3 million barrels per day (bpd), but west African nation has not yet been able to produce to its capacity as a result of violence in oil rich Niger Delta where operations have been under constant threat from militants claiming fair share of oil wealth to local communities.

By staff writer

© afrol News

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