President Goodluck Jonathan signed into law a 2014 spending plan of 4.7 trillion naira ($29 billion), delayed for five months over disputes with lawmakers.
The budget of Africa’s biggest oil producer is based on a crude output of 2.388 million barrels a day at a benchmark price of $77.5 a barrel and an exchange rate of 160 naira to the dollar. Total spending for the year will reach 4.96 trillion naira, with the addition of 268 billion naira in savings from the reduction of fuel subsidies in 2012, according to the Finance Ministry.
“‘The late timing has not hampered the running of the economy,’’ Finance Minister Ngozi Okonjo-Iweala told reporters today in the capital, Abuja. ‘‘The effect of the late passage has been effectively minimal,’’ she said, estimating the budget deficit at around 1 percent of the size of the economy, which is Africa’s biggest.
In medium-term expenditure proposals sent to lawmakers in September, Jonathan said revenue from crude exports was expected to drop in 2014 due to output disruptions caused by theft from pipelines. Nigeria depends on oil for about 80 percent of government funds and more than 95 percent of foreign income, according to the Finance Ministry.
The budget is the last before the 2015 election year, when Jonathan as well as lawmakers and state governors are due to seek new mandates in general elections. Jonathan hasn’t said whether he plans to stand for re-election.
Lawmakers in both houses of parliament passed a budget of 4.7 trillion naira last month. Investors are monitoring Africa’s top oil producer for signs that spending will surge in a pre-election year as it did before the 2011 presidential vote, when it climbed 17 percent.
Okonjo-Iweala said yesterday the government will stick to its economic growth forecast of 6.75 percent for this year even after a series of bomb attacks by Islamist militants left hundreds dead, threatening to undermine investor confidence.