Nigeria is recovering from a downturn triggered by the 2014 crash in the price of oil, its key export and main foreign currency earner.
Thursday 11, April 2019
(Bloomberg) –Nigeria’s Budget Minister said that the government will propose a supplementary budget later this year to boost capital spending and fund a 67 per cent increase in the minimum wage as government revenues improve.
Udo Udoma, Nigeria’s Budget Minister said that additional spending plans will be funded from improved oil revenue as the price of crude rose to above $70 a barrel compared with a level of $60 that the 2019 budget was based on.
The government seeks to ramp expenditure on infrastructure after cutting the 2019 spending proposal due to revenue that was below target, gross domestic product (GDP) is on track to expand three per cent this year compared with 1.9 per cent in 2018, Udoma said.
“There are a number of projects which we had to cut down because of funding, the works, power and housing budget, in my view we could not fund it to the level to make the kind of impact we need, added Udoma.
Nigeria has struggled to boost revenue, partly due to the government’s inability to grow its tax base and a failure to deliver on a plan to reduce its stake in oil joint ventures. The nation has earmarked NGN 2.24 trillion ($6.23 billion) for capital projects, that include roads and rail, in 2019.
President Muhammadu Buhari signed a plan to boost earnings by an extra NGN 720 billion this year by reducing the country’s holdings in oil joint ventures with international producers including Royal Dutch Shell, Exxon Mobil and Chevron.
Udoma said restructuring the assets will improve their efficiency and position them for better revenue performance.