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%
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
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
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.