ABUJA, NIGERIA - Nigeria's parliament passed a record 9.12 trillion naira ($29.8 billion) budget for 2018 on Wednesday aimed at boosting growth in West Africa's biggest economy nine months before the country's next presidential election.
Growth remains fragile after Africa's top crude oil producer last year emerged from its first recession in 25 years. The recession was largely caused by low crude prices and militant attacks on energy facilities since oil sales make up two-thirds of government revenue.
The total sum laid out in the spending plan passed by the Senate is higher than the 8.6 trillion naira budget presented to parliament by President Muhammadu Buhari in November.
The budget was passed by the Senate, the upper chamber, and by lawmakers in the lower House of Representatives shortly afterwards. The budget still needs to be returned to Buhari to be signed into law.
"We must grow our economy away from oil. Hopefully, the current budget, when signed into law, should help us in this regard," said Senate President Bukola Saraki.
Senate lawmakers said the increase from the plan presented by Buhari six months ago was due to the assumed oil price rising to $51 per barrel, up from $45 in Buhari's earlier version.
The budget assumes crude oil production of 2.3 million barrels per day and an exchange rate of 305 naira per dollar. Brent crude stood at $78.43 per barrel by 1643 GMT.
"We still consider the oil price benchmark to be rather conservative given this year's oil price outlook and would have preferred to see a steeper hike accompanied by lower borrowing," said Olalekan Olabode, an economist at Lagos investment firm Vetiva Capital.
The budget proposes the use of 2.2 trillion naira to service debts and would operate a deficit of 1.73 percent of gross domestic product this year.
Delays in passing budgets, amid wrangling between the executive and legislature, are common in Nigeria and hindered the implementation of Buhari's previous spending plans.
Buhari, who took office in 2015, plans to seek a second term in next February's election. His handling the economy is likely to be a major campaign issue.
Budgets under Buhari, who took office in May 2015, have been Nigeria's largest ever. But economists say implementation has been poor and failed to provide the type of capital expenditure needed to improve infrastructure.
"The implementation of fiscal policy is still weak and this year there is an additional risk of unproductive spending in the lead up to the election," said Cobus de Hart, a senior economist at South Africa's NKC African Economics.