The Federal government has revised downwards, the growth forecast for the country to 6-7 percent, from 7-8 percent previously declared.
The coordinating Minister for the Economy and Minister of finance, Ngozi Okonjo-Iweala made this known on Wednesday at a news briefing during an African Development Bank annual meeting in the Tanzanian city of Arusha.
“We can do 6-7 percent this year. That would be very good,” she stated.
During the budget presentation for 2012, the federal government had forecasted a 7-8 percent growth.
Nigeria’s economy grew 6.17 percent in the first quarter of this year, down from 7.68 percent growth in the previous quarter, figures from the National Bureau of Statistics showed last week.
“We have been growing at an average of 7 percent these past few years but now we have a dip in first quarter growth … This is understandable given the drop in agricultural activity in the north due to … disturbances,” Okonjo-Iweala said, referring to the insurgency by Islamist sect Boko Haram in the north.
The central bank has put lower growth down to falling crude oil prices and domestic oil output, which mean Nigeria faces a potentially sustained slowdown. Worries over growth persuaded it not to raise interest rates above 12 percent this month despite higher inflation.
Year-on-year inflation rose to 12.9 percent in April, from 12.1 in the previous month.
“We hope to get inflation down to the low double-digits or high single-digits by the end of the year,” Okonjo-Iweala said.
Though Nigeria’s economy has been one of the fastest growing in the world, poor fiscal management has tended to waste some of these gains and trigger inflation.
Mismanagement of the oil industry and regulatory uncertainty pending the passage of an oil law mean production is now in decline.
The finance ministry revealed on Wednesday that Nigeria has already spent half its 2012 budget for a massive fuel consumption subsidy on arrears for last year, raising the prospect it may have to scrap the scheme or issue debt just to sustain it.
The government attempted to remove the subsidy in January but popular protest forced its partial reinstatement.
Okonjo-Iweala said January had been “a slow month” because of the strikes that shutdown economic activity during protests.