Buhari Presents Record Budget to Revive Slumping Nigeria Economy

Nigerian President Muhammadu Buhari asked lawmakers to approve the country’s biggest ever budget on Tuesday as he looks to revive an economy hit by collapsing oil prices.

Buhari outlined plans for the government to spend 6.08 trillion naira ($30.8 billion) in 2016, an increase of about 20 percent from this year. The deficit will more than double to 2.2 trillion naira, or 2.16 percent of gross domestic product.

“The budget proposal seeks to stimulate the economy, making it more competitive by focusing on infrastructure,” Buhari, a 73-year-old former general who last ruled Nigeria in the mid-1980s, told lawmakers in Abuja, the capital. “We believe that this budget, while helping industry and commerce pick up, will address the issue of unemployment.”

Africa’s largest oil producer, which usually derives two-thirds of government revenue from the commodity, has seen its finances battered by crude prices that have fallen almost 70 percent in the past 18 months to below $40 a barrel.

Growth is set to ease to 3.2 percent this year, the slowest pace since 1999, according to a Bloomberg survey of economists. The government expects it to accelerate to 4.37 percent in 2016, Buhari said.

The deficit will be plugged with 1.84 trillion of borrowing, 900 billion of which will come from international debt markets, Buhari said.

Capital expenditure, as opposed to recurrent spending on public sector salaries and pensions, will more than triple to 1.8 trillion naira in 2016, meaning its proportion of the budget will rise to 30 percent from around 15 percent this year.