(Corrects May 11 story to show figures in third paragraph are
for debt service, not borrowing)
By Camillus Eboh
ABUJA May 12 Nigeria's parliament signed off on
a record 7.44 trillion naira ($24.4 billion) budget for 2017 on
Thursday, aiming to drag Africa's biggest economy out of its
first downturn in quarter of a century, lawmakers said.
The oil producer is in its second year of recession, brought
on by low global crude prices that have slashed government
revenues, weakened the naira currency and caused chronic dollar
shortages. It has also been wrestling with an Islamist
insurgency in the north and militant attacks in the Delta
The budget is based on an assumed oil price this year of
$44.5 a barrel, while global benchmark Brent crude is currently
trading above $50. The plan also entails debt service for
foreign borrowing of 175.9 billion naira and domestic borrowing
of 1.488 trillion naira.
"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 7.298 trillion naira draft submitted by President Muhammadu
Buhari in December.
The budget must now be signed by the president to become
law. Buhari is on leave in Britain and on Sunday handed over
power to his deputy Yemi Osinbajo, who will sign the budget in
The plan projects a deficit of 2.21 trillion naira, 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 percent of its loans would come from
offshore, compared with the previous 16 percent, 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 struggled to tap concessionary loans
from the World Bank.
The government had initially planned to borrow to 1.25
trillion naira from the local market and 1.067 trillion naira
abroad this year.
Economist says increasing domestic loans was a sign that the
country was struggling to attract interest offshore and could
send interest rates higher at home.
The government's local-currency debt spiked to 13.88
trillion naira last year, up from 8.83 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
($1 = 304.60 naira)
(Reporting by Camillus Eboh, Alexis Akwagyiram and Chijioke
Ohoucha; Writing by Ulf Laessing; Editing by John Stonestreet
and Hugh Lawson)