Nigeria cranks up spending to record $39.8 bln in 2022 budget

Nigeria's president unveiled a record 16.39 trillion naira ($39.8 billion) budget for 2022 on Thursday, with a projected 25% year-on-year rise in government spending as the economy struggles with the impact of the pandemic.

The deficit will rise to 6.26 trillion naira, or 3.39% of GDP to be funded by new borrowing, proceeds from privatisations and drawdowns on loans secured for specific projects, Muhammadu Buhari told a joint sitting of the Senate and the House of Representatives.

The plan for Africa's top oil exporter assumes crude output of 1.88 million barrels a day and an oil price of $57 per barrel, said Buhari.

"Some have expressed concern over our resort to borrowing to finance our fiscal gaps. They are right to be concerned. However, we believe that the debt level of the Federal Government is still within sustainable limits," he said.

Economic analysts said Nigeria's budget signaled the government was not about to make any major policy shift as spending would remain elevated to deal with a deteriorating security situation in many parts of the country.

The armed forces have been struggling to contain Islamist insurgencies in the northeast, a spate of mass abductions and deadly bandit attacks in the northwest, conflicts between farmers and herders in many areas and a general surge in crime.

"In the meantime, Nigeria is likely to be stuck with large budget deficits. If borrowing conditions prove to be unfavourable, the government may increasingly lean on the central bank to finance budget shortfalls," said Virag Forizs, emerging markets economist at Capital Economics.

The World Bank has said that rising insecurity, along with high food inflation and stalled reforms, was a drag on growth and a factor in rising poverty.

The economy is projected to grow by up to 3% this year after it expanded by 5% in the second quarter. It contracted in 2020 due to the pandemic, though it managed to exit recession in the fourth quarter, but growth is fragile.

LOW REVENUES

Buhari confirmed a previously published 2022 GDP growth forecast of 4.2% and an inflation projection of 13%.

"Our target over the medium term is to grow our revenue-to-GDP ratio from about 8 percent currently to 15 percent by 2025," Buhari said. This would be achieved by enhancing tax and excise revenues through reforms and administration measures, he added.

Nigeria has passed a string of record budgets since Buhari took office in 2015, but the country has struggled to fund the spending plans due to low revenues. The pandemic has added to the revenue problems.

According to IMF data, Nigeria has among the lowest revenues globally, with general government revenue between 2015 and 2019 at 7.9% of GDP, compared with a Sub-Saharan African average of 12.7% and a global average of 29.8%.

Buhari said a fuel subsidy which successive governments have tried unsuccessfully to scrap, continued to erode revenues. Attempts to remove it have triggered protests and strikes.

By Felix Onuah and Chijioke Ohuocha 

Reuters

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Clinics and hospitals in northern Nigeria are struggling to cope with high numbers of severely malnourished children. Food shortages have worsened as violence by armed groups intensifies. Al Jazeera's Ahmed Idris reports from Maiduguri, Nigeria.

Dozens killed and abducted in Nigeria’s north

At least 32 people have been killed in Nigeria’s north after armed groups attacked remote communities in 2 states, authorities said, the latest incident in a spiraling cycle of violence in Africa’s most populous country.

Local officials and residents told The Associated Press that the killings and the abduction of 24 persons in Niger and Sokoto states were carried out by the marauding gunmen operating across the northwest and central parts of Nigeria who are notorious for abducting hundreds of school children and travelers for ransom.

The attacks happened barely 48 hours after about 40 persons were killed in the northern region in what residents said could be a part of a prolonged religious conflict between Muslim and Christian communities in Kaduna state.

In the north central Niger state, assailants attacked Muya local government area on Tuesday morning, killing 14 people and abducting seven women, according to Garba Mohammed, the chairman of Munya LGA. The police spokesperson confirmed the incident to the AP but said he had no further details.

“These bandits invaded one of the communities around 2 a.m. yesterday, set the houses ablaze, burnt the people in their rooms while some of them (the attackers) were standing outside; those trying to escape were caught and slaughtered,” said Mohammed.

After the raid in Kachiwe, the assailants went to two more communities nearby, killing 2 persons they saw on their way before killing 16 more residents, the official added.

Mohammed said the gunmen took advantage of the blockade of telecommunications access. Authorities imposed the block to stem the exchange of information between gunmen and local residents who were acting as informants.

During a similar attack in the northwest Sokoto state, 17 persons were abducted from their homes in Sabon Birni local government area, according to Amina Al-Mustapha, the state lawmaker from the affected area.

The bandits attacked the Gatawa community in the neighboring country Niger on Tuesday, less than a week after earlier attacking the area and killing 22 persons mostly security operatives,

“We are under bandits now; We are suffering now,” the lawmaker said, adding that “at least 60%” of about 500,000 residents in Sabon Birni have fled the community, some taking refuge in Niger Republic which is just about 100 miles (160 kilometers) away.

Violent attacks by the assailants known locally as bandits are common across the northwest and central parts of Nigeria, especially in remote communities where there is no adequate security presence.

Authorities have said that special military operations targeted at restoring peace in the troubled states have been yielding results with dozens of the assailants often killed when their hideouts in abandoned forest reserves are bombarded.

But Nigeria’s security operatives, especially those operating in violence hotspots, are still outnumbered by the gunmen who often raid communities in their hundreds. The assailants are made up of various groups and security analysts have said they are mostly young men from the Fulani ethnic group who had traditionally worked as nomadic cattle herders and are caught up in a decades-long conflict with Hausa farming communities over access to water and grazing land.

In Sokoto state, lawmaker Al-Mustapha told AP that the Sabon Birni area had five military bases as of last year, but “now, we have only one in the entire with security operatives present,” with the others abandoned after suffering attacks.

By Chinedu Asadu

AP