Nigerian President Muhamadu Buhari yesterday signed into law a budget with record spending despite the risk of a slump in oil revenue.
The 2020 budget of 10.81tn naira ($28.38bn) was approved by parliament in June after Buhari called for a raise to the original request of 10.59tn naira.
In a ceremony in the capital Abuja, Buhari said the increase of 216bn naira was a “response to recent developments, in particular the Covid-19 pandemic.”
Nigeria, Africa’s biggest crude producer, relies on oil sales for 90% of foreign exchange earnings.
Buhari noted that global crude prices had tumbled from a high of $72.20 per barrel in January to below $20 per barrel in April. They have since hovered around $40. The revised budget is based on assumptions of $28 per barrel as against $57 previously. Nigeria has also reduced its crude output in line with Organisation of Petroleum Exporting Countries (Opec) efforts to strengthen the oil market.
“Global trade has generally been disrupted as almost all economies were locked down for protracted periods in the wake of the Covid-19 pandemic,” Buhari said.
But he added that the government was well-positioned to safeguard the economy, thanks to the revised budget and a N2.3tn stimulus programme.
In February, credit rating agency Moody’s listed Nigeria “among countries (in West Africa) whose situation causes the most concern in terms of debt sustainability.”
On April 28, the International Monetary Fund (IMF) approved $3.4bn in emergency financing for Nigeria to help deal with the economic fallout of the pandemic.
LEAVE A COMMENT Your email address will not be published. Required fields are marked*
10 countries account for 80% of Africa Covid-19 testing
Mauritania PM and government resign amid corruption probe
Uganda’s approach curbs virus, even as Africa nears 1mn cases
Suspected Boko Haram militants kill at least 13 in Cameroon
WHO warns of drawn out pandemic as South Africa cases top 500,000
Kenya Airways resumes international flights
10 dead in Nigeria as boat capsizes
Zimbabwe author arrested
Zimbabwe’s security forces clear streets ahead of planned protests