Nigeria’s economy will grow by 3.01 per cent this year, equated to a forecast of two per cent by the International Monetary Fund (IMF), the Minister of Budget and National Planning, Senator Udo Udoma, said.

The IMF, in its World Economic Outlook Update, said in January that the nation’s economy would expand more slowly in 2019 than previously predicted against the backdrop of the recent drop in global crude oil prices.

It, therefore, revised down its Gross Domestic Product projection for the country to two per cent from the 2.3 per cent projected in October 2018.

Udoma, however said the proposed 2019 budget was intended to further reposition the economy on the path of faster, inclusive, diversified and sustainable growth as well as to continue to lift significant numbers of Nigerians out of poverty.

Sen. Udoma spoke at the Deloitte Dialogue on Nigeria’s Economic Outlook for 2019, in Lagos.

According to the minister, the inflation rate is expected to trend downwards to single digit of 9.98 per cent in 2019 from 11.44 per cent as of December 2018.

He said this would be possible with the improved coordination of fiscal and monetary policies, exchange rate stability, improved oil export earnings and capital inflows, as well as the continuation of the current prudent management of foreign exchange reserves by the Central Bank of Nigeria.

“Government is committed to growing the economy, and accordingly the 2019 Budget Proposal has been designed to continue to provide the stimulus and support required to spur growth in the economy,” he said.

Udoma stated that, although the current real GDP growth performance is still a little sluggish, which is expected as the country is just recovering from the recession, it indicates a positive momentum, especially with regards to the growth of the non-oil sector.

He said, “Our aim is to take all measures necessary to ensure that we increase the growth rate whilst maintaining fiscal sustainability.”

Explaining the basis for the oil price projections in the budget, the minister said oil prices would be determined by the interaction between supply and demand for oil in international markets.

Hence, he said that it was the supply-side factors that had been mainly responsible for the price increase in 2018 and the recent decline.

On oil production levels, the minister said that President Muhammadu Buhari had directed the Nigerian National Petroleum Corporation to work hard to achieve the budget target of 2.3 million barrels per day.

“The ERGP oil production target for 2019 is 2.4mbpd, and the NNPC production submission is 2.45mbpd. We have revised the ERGP target and NNPC forecast downwards to 2.3mbpd for the 2019 budget proposal,” he added.

According to Udoma, the 2019 proposed budget size is smaller than the 2018 budget because of the need to contain the size of the deficit so as to keep the country’s borrowing within prudent limits.

He noted that the proposed deficit of N1.859tn in 2019 “is about 1.33 per cent of GDP, which is within the three per cent threshold stipulated in the Fiscal Responsibility Act (FRA) 2007.”

The minister said the government would leverage private sector capital for the development and refurbishment of road networks in industrial clusters and key economic areas in the country.