Niger cuts budget by 7 pct on oil revenue shortfall

Wed Oct 17, 2012 11:09am GMT
 

NIAMEY (Reuters) - Niger, one of the world's newest oil-producing nations, has reduced its 2012 budget by nearly 7 percent to 1.35 trillion CFA francs in response to lower government income.

The revision is the third since the budget was adopted late last year and is due largely to projected shortfalls in customs duties and revenues from its energy sector.

The government increased spending by 10 percent in July to cope with drought and conflicts along its porous borders, including an Islamist occupation of northern Mali.

"The cabinet of ministers ... adopted a revised finance law which brings the state budget for 2012 to 1.34509 trillion CFA francs, instead of 1.4441 trillion," said a statement read on state-owned television late on Tuesday.

According to the statement, state oil profits for the year were expected to reach 4 billion CFA francs, far short of an earlier projection of 33.5 billion CFA francs.

The government also forecast a shortfall of around 69 billion CFA francs in revenues from its customs services. The contribution of foreign donors was also expected to decrease, the statement said.

Already a top uranium producer, Niger pumped the first oil from its estimated 650 million barrels of reserves in November 2011 through a $5 billion joint venture deal with Chinese state oil company CNPC.

But the country's oil minister said earlier this week that its Chinese-run Soraz oil refinery is currently operating at only half its 20,000 barrel capacity due to an inability to compete with regional price levels.

The refinery, 60 percent owned by CNPC and 40 percent by Niger, was inaugurated in November 2011 amid hopes it would make Niger self-sufficient in fuel and bring down prices.

A third of fuel production is destined for domestic consumption and the rest for export.

Niger had forecast economic growth of around 12 percent this year due largely to anticipated oil revenues.

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