National Assembly has passed the N7.44 trillion budget for 2017 on aiming to drag the nation’s economy out of its first downturn in a quarter of a century.
The budget is based on an assumed oil price bench mark of $44.5 a barrel, while global benchmark Brent crude is currently trading above $50. The plan also entails foreign borrowing of N175.9 billion and domestic borrowing of N1.488 trillion.
“We do hope that this budget of recovery…will go a long way to help Nigeria to come out of the economic recession and bring growth,” Senate President Bukola Saraki told lawmakers.
Both chambers of parliament agreed to a bigger budget than the N7.298 trillion draft submitted by President Muhammadu Buhari in December.
The budget must now be signed by the president to become law. Buhari is on medical leave in Britain and on Sunday handed over power to his deputy Yemi Osinbajo, who will sign the budget in Buhari’s absence.
The plan includes N1.84 trillion to service loans and projects a deficit of N2.21 trillion, implying a deficit equivalent to 2.18 percent of Nigerian GDP.
Last August Nigeria approved a three-year plan to borrow more from abroad so that 40 per cent of its loans would come from offshore, compared with the previous 16 per cent, and to extend its debt maturity profile.
It planned to borrow as much as $10 billion from debt markets, with about half of that coming from abroad to lower its funding cost, but it has tap concessionary loans from the World Bank.
The government had initially planned to borrow to N1.25 trillion from the local market and N1.067 trillion abroad this year.
The government’s local-currency debt spiked to N13.88 trillion last year, up from N8.83 trillion in 2015, and is set to rise further.
Last year’s budget – passed in May 2016 – was delayed for months due to disagreements between lawmakers and the presidency, cutting the supply of government money and deepening the economic crisis.
Osinbajo, a lawyer who is seen as more friendly to business than Buhari, chaired cabinet meetings during the president’s previous medical leave and played an active role in driving policy changes.
