The Federal Government (FG) finalized plans to ramp up spending and borrowing as it grapples with reviving an economy that shrank by the most in a quarter century last year due to the coronavirus pandemic.
Expenditure is projected at N16.4 trillion ($39.7 billion) next year, or 17.7 per cent more than initially proposed, President Muhammadu Buhari said in a budget presentation to lawmakers on Thursday. The increased spending will help propel economic growth, forecast at 4.2 per cent in 2021, Buhari said.
The government expects to raise N10.13 trillion in revenue, N3.15 trillion of which will be generated from crude sales and taxes. The budget assumed an oil price of $57 a barrel, and that the country will pump an average of 1.88 million barrels a day. Nigeria is Africa’s larges crude producer.
The spending increase will widen the budget deficit to N6.3 trillion, or 3.4 per cent of gross domestic product, exceeding a legal threshold of three per cent provided by Nigeria fiscal responsibility law. “We need to exceed this threshold considering our collective desire to continue tackling the existential security challenges facing our country,” he said.