Nigeria President Muhammadu Buhari on Friday presented a record spending plan that hinges on a significant increase in oil output and the fastest economic growth rate in almost ten years.
Expenditure is forecast to increase by 18 percent to N20.5trn (US$47bn) in 2023. The spending plan will drive economic growth, with a 3.75 percent expansion in GDP forecast for next year. The budget deficit is projected to come in at N10.78trn, or 4.78 percent of GDP, exceeding a legal threshold of 3 percent stipulated in Nigeria’s fiscal responsibility law.
Buhari said that the government expects to raise N16.87trn in revenue, N1.9trn of which will be generated from crude sales and taxes. The budget assumed an oil price of US$70/bbl, an exchange rate of N435.57 and that the country will pump an average of 1.69m barrels a day, compared to 1.16m in September. President Buhari also noted that the government plans to scrap the fuel subsidy next as “its current fiscal impact has clearly shown that the policy is unsustainable.”