2012 BUDGET SPECIAL
The proposed 2012 budget is based on the following assumptions:
Ø Benchmark oil price of US$70/barrel
Ø Oil production of 2.48 million barrels per day (mbpd)
Ø Exchange rate of NGN155/US$;
Ø Projected GDP growth rate of 7.2%
Ø Projected inflation rate of 9.5%
Comments:
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Given the gradual global economic recovery that has seen oil prices oscillate between $100-$120 per barrel (pb) in 2011, and the recent downward review of the oil price benchmark from $75pb approved in the 2011 Amended Budget to $70pb, we are of the view that the FG’s $70 pb assumption is realistic
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While this year’s budgeted estimate for capital expenditure is an improvement from the 2011 budget, it may be considered insufficient given the huge infrastructure deficit in the economy
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We expect to witness increased growth in the priority sectors as highlighted in this budget with attendant yields for strategic investors.
We hope you find it informative and insightful.
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