LAGOS, AUGUST 11, 2016 – Nigeria will spend 100 billion naira ($312.50 million) on capital projects in the coming days as part of the 2016 budget, Vice President Yemi Osinbajo said on Thursday, as the country tries to inject life into an economy facing recession.Africa’s largest economy is in the middle of its worst crisis in decades, as a slump in oil revenues hammers public finances and the naira. Gross domestic product shrank 0.36 percent in the first quarter and the central bank governor has said recession is likely.
Government capital spending so far has reached 332 billion naira, Osinbajo said. The record budget has been held up for months by wrangling between President Muhammadu Buhari and parliament.
Another 100 billion naira will be released in the next few days to fund power, housing, transport, agricultural and defence projects, Osinbajo said.
“We have pledged to keep capital spending at a minimum of 30 percent (of the 6.06 trillion naira budget),” he told a business forum in Lagos.
But Osinbajo also said many of Nigeria’s 36 federal states were still struggling to pay the salaries of civil servants, despite assistance from the federal government.
He said a float of the naira and more flexible foreign currency regime in June had eased pressure on foreign reserves, without giving details. The naira has lost some 40 pecent since then.
“I believe … there will be an increase in supply of foreign exchange,” he said.
He also said Nigeria had saved 1.4 trillion naira by ending fuel subsidies and increasing fuel prices in May. “Fuel consumption is down 800 trucks per day from 1,600 trucks per day before the price increase,” he said.
Publication of GDP data for the second quarter will be delayed until Aug 31, the head of the statistics office said on twitter.
With oil prices dropping, the government has struggled to fund the budget. It is seeking advisers and bookrunners to manage a planned $1 billion eurobond it intends to offer this year.
