Nigeria forced to revise budget as oil prices remain low

Nigeria has been forced to revise its budget following the dramatic fall in the price of oil.

Its finance minister, Ngozi Okonjo-Iweala, says its economy will now grow at 5.5% this year, rather than 6.4%.

The new budget is based on an oil price of $65 a barrel, rather than the previous assumption of $77.40, although the revised figure is still higher than the recent level of about $60.

Nigeria's government receives more than 75% of its revenues from oil exports.

The country is trying to reduce its dependence on oil.

Prices have steadily dropped in recent months and are now about half their previous levels.

Falling demand on the back of slackening economic growth and an increase in alternative energy supplies, such as shale gas, have led to a mismatch between supply and demand.

'Fast'

Dr Okonjo-Iweala urged Nigerians "to begin thinking of the country [as] a non-oil country".

Nigeria has taken some key steps already in response to the falling oil price, which is at its lowest level since July 2009.

It has devalued the naira and has applied higher taxes on luxury items.

Dr Okonjo-Iweala said: "This budget is based on a few key indicators, $65 a barrel benchmark and we are going to stick to it for now, in spite of the decline in prices, because we feel the average price next year will be around $65 to $70.

"The production level is 2.27 million barrels per day. We've revised the growth rate based on the new parameters for the country, down from 6.35% to 5.5% next year. But that is still one of the fastest growth rates we're experiencing in the world today."

Nigeria's currency, the naira, lost 3.5% on the day, hitting a record low of 187.10 to the dollar.