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Last Updated: Friday, December 17th, 2004 HOME | Previous Page The Economist backs govt on $27 per barrel benchmark   By Sanya Adejokun, Senior Correspondent, Abuja   International economic magazine, The Econimist has backed the insistence by President Olusegun Obasanjo to peg the 2005 budget on $27 per barrel. Nenad Pacek, Director, Central Eastern Europe, Middle East and Africa of the magazine’s Corporate Network at a briefing to herald the coming first business roundtable with the government of Nigeria in Abuja on Thursday said it was smart to be conservative when benchmarking budgetary projections on oil price. “It is smart to be conservative when it comes to oil prices. Most governments all over the world that are dependent on oil revenue put in their budget slightly lower figures than expected oil price” Pacek said. He noted that fiscal imbalance would be affected if higher prices are chosen over lower figures. Setting the benchmark at $27 he said was good for Nigeria because “it will provide extra funds for the Nigerian government which it can use for investments. Pacek noted that Nigeria will benefit immensely from the decision to be conservative because oil prices would hover around $37 per barrel in 2005. Current crude oil prices he continued, are unnaturally high as they were mainly decided by speculations rather than the factors of demand and supply. There would continue to be a progressive reduction in world oil prices in the coming years with forecasts predicting $30 per barrel in 2006. These predictions, he explained, underscore the necessity to urgently pursue investments in other fields like manufacturing, agriculture and tourism  as there would be a significant impact oneconomic growth on the nation’s economy which would see reduction in growth from the 10 per cent recorded in 2003. Economist Conferences which is a member of the Economist Group he said, is fully funding theconference commencing on January 17, 2005 but with sponsorship from private corporate organisations.   Copyright� 2004. All Rights Reserved. Independent Newspapers Limited Block5, Plot 7D, Wempco Road, Ogba, P.M.B. 21777, Ikeja, Lagos State, Nigeria. www.independentng.com e-mail: [email protected] Designed By Powered By DNet.

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