Oil Price Drop Won’t Endanger Nigeria – Jonathan …As FG Lowers Budget Benchmark To $65

President Goodluck Jonathan yesterday assured Nigerians and foreign investors that contrary to fears being expressed in many quarters, the Nigerian economy will remain stable despite the drop in global oil prices.
A statement by his Special Adviser on Media and Publicity, Dr. Reuben Abati, quoted the President as giving the assurance while granting audience to a delegation of multinational industrial giant, General Electric,  at the Presidential Villa, Abuja. The firm’s Vice Chairman and CEO, Mr. John Rice, led the delegation.
The President added that the Federal Government would do everything possible to maintain domestic economic stability. He said the government might even perform better under the current situation since the best always come out of challenging situations, and  pleaded with the company to maintain its confidence in the country.
“We promise our people that even with the drop in oil prices, the economy will be stable. I urge you to maintain the confidence you have in this country before the oil price drop, and even expect better management from us.
Sometimes, it is when you are challenged that you do better than when everything looks good. So, I assure you, other investors in this country and all Nigerians that the government will do everything necessary to stabilise the economy and that the drop in the price of crude oil will not create so much distortion in our economy,” Jonathan was  said to have told the delegation.
The President thanked GE for its commitment to increase its investment in Nigeria with the attendant benefit of job creation for many more Nigerians. He also welcomed GE’s plans to set up a facility in Calabar to manufacture components for the oil and gas sectors.
Rice told the President that GE has committed about $30 million to the development of the Calabar Plant and was already undertaking the training abroad of some Nigerians who will work there.
He expressed his company’s appreciation of the support and encouragement being extended by the Federal Government to foreign investors and assured the President that fluctuations in global oil prices will not affect the commitment of GE to the country.
Meanwhile, the federal government has lowered its budgeted oil price for a second time in less than a month, signaling government revenue is set to plunge.
The medium-term budget plan for 2015 to 2017 will be based on an oil price of $65 a barrel, Paul Nwabuikwu, an Abuja-based spokesman for the Finance Ministry, said in an e-mail .
On November 16, Finance Minister Ngozi Okonjo-Iweala cut the proposed benchmark price to $73 a barrel for 2015, down 5.8 percent from this year’s budgeted price.
Global oil prices have plunged more than a third since June, roiling Nigeria’s markets, eroding foreign-currency reserves and prompting policy makers to devalue the naira for the first time in three years.
With crude exports accounting for about 70 percent of government income, the revenue slump may force authorities to curb spending in an election year. “It is a realistic price for the country,” Bismarck Rewane, chief executive officer of Lagos-based consultancy Financial Derivatives Co., said by phone  from London.
“The cut will mean a significant reduction to the budget. The government has to push for the legislature to accept it.” The revised budget plan was submitted to the National Assembly for approval, Nwabuikwu said.