Buhari Proposes More Borrowing, More Spending in 2021

Thursday, 8 October 2020

By Bashir Olanrewaju

President Muhammadu Buhari tabled proposals before a joint session of the legislature in Abuja on Thursday to spend more than 13 trillion naira next year to run his administration and implement development projects.

The amount is 25 percent more than the budget for the current year, with the deficit to be funded by additional borrowing of 4.28 trillion naira, about a quarter of the budget, from domestic and foreign sources. 

Buhari at the National Assembly

This would mainly be done through the domestic sale of bonds and treasury bills and the issue of eurobonds in the international debt market. 

The budget is based on crude oil output of 1.86 million barrels per day, sold at 40 dollars a barrel,  using an exchange rate of 379 naira per dollar.

Of the proposed sum, 3.58 trillion naira will go for capital projects, 3 13 trillion naira will go for debt service, while recurrent expenditure will gulp the bulk of the remainder.

Buhari said his government expected negative growth figures in the third quarter to push Nigeria into its second recession in four years as the gloval impact of the coronavirus disease lingers.