The Federal Government on Wednesday slashed the 2015 budget proposal from N4.8 trillion to N4.6 trillion due to the slump in oil price.
This was stated in letter sent to the National Assembly by President Goodluck Jonathan who hinged the reversal on recent developments in the international oil market, which necessitated that the Medium Term Expenditure Framework be revised.
The oil benchmark in the early proposal of 2015 budget was $78 per barrel, but the revised proposal put the benchmark at $73 per barrel.
The government also projects N4.733 trillion and N4.930 trillion for 2016 and 2017 respectively.
In the proposal, N750 billion will be used to service both foreign and local debts.
The oil production estimate is now reduced 2.2 million barrels per day at exchange rate of N162 to $1 from 2.3 million barrel per day.
The letter reads: “As you may recall, I had transmitted the 2015-2017 Medium-Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) to the National Assembly for consideration and approval. However, recent development in the international oil market which necessitated that the Medium Term Expenditure Framework be revised.
“Consequently, following further consultation with key stakeholders, adjustments have been made to some of the key parameters as well as to fiscal estimates in the MTEF.”