17 October 2019

 

Predictions

  • Government will struggle to achieve 2020 budget revenue target, limiting ability to implement public spending promises in coming year
  • Lack of significant investment in infrastructure and jobs will mean efforts to…
  • Government attempts to generate revenue by recovering funds from international oil companies will…

 

Analysis

President Buhari presented a record USD 34 billion budget for the 2019/20 financial year to the National Assembly on 8 October. Buhari said that the increase in expenditure would benefit the non-oil sector and improve infrastructure, boosting economic growth. Meanwhile, the Senate approved the Government’s 2020-2022 Medium Term Expenditure Framework on 4 October, which proposed similar spending increases over the next few years. The Government also said on 11 October that it would seek to recover funds of up to USD 62 billion owed as its share of income from production-sharing contracts agreed in 1993 with six international oil firms operating in Nigeria. The Senate subsequently passed a bill on 15 October amending the Deep Offshore and Inland Basin Production Sharing Contract Act (PSCA) to review of the terms of deep offshore oil contracts every eight years and include provisions for the payment of royalties to the Government in accordance with changes in oil prices.

The budget increase demonstrates that Buhari is seeking to deliver on…

Source: The Federal Inland Revenue Service of Nigeria

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