Nigerian President Muhammadu Buhari on Friday signed off on his government’s 2022 budget of a record 17 trillion naira ($41 billion), as Africa’s largest economy struggles with soaring inflation.
Last year’s slump in oil prices triggered by the coronavirus pandemic was hard on the continent’s top producer, where activity shrank by 1.8 percent according to the World Bank.
Although Nigeria has returned to growth this year, criminal attacks and kidnappings in the northwestern and central states have held it back, along with strong inflation in food prices.
Government spending plans for next year are 26 percent higher than 2021.
But the real-term increase will be far smaller when compared with forecasts for 17 percent inflation.
Even as he signed the budget, Buhari attacked “worrisome changes” by lawmakers, who had added an extra 550 billion naira of outlays for the coming year.
“I will revert to the National Assembly with a request for amendment and/or virement (money transfer)… to ensure that critical ongoing projects… and those nearing completion do not suffer a setback due to reducing funding,” the president said.
The spending plan assumes that the economy will expand 4.2 percent next year, after 2.7 percent in 2021, and calls for a deficit of more than six trillion naira, to be financed with new borrowing.
“Effective implementation is very critical for delivering our legacy projects, promoting social inclusion and strengthening the resilience of the economy,” said Buhari, who does not plan to stand for re-election in a 2023 presidential poll.