UPDATE 2-Nigeria set to keep record 2020 budget to fight coronavirus despite earlier cut

(Adds budget revisions, background)
By Felix Onuah
ABUJA, May 13 (Reuters) - Nigeria looks set to maintain its
record 2020 budget of more than 10.5 trillion naira after a
boost to healthcare spending to fight the novel coronavirus
outweighed an earlier cut to cushion the impact of an oil price
crash.
Finance Minister Zainab Ahmed said on Wednesday that the
Cabinet approved a revised budget of 10.52 trillion naira, lower
than 10.59 trillion naira approved in December by President
Muhammadu Buhari. She said spending related to COVID-19 had not been
previously captured.
Ahmed told reporters the budget revisions approved at
Wednesday's ministerial meeting assumed an oil price of $25 per
barrel along with output of 1.94 million barrels per day and an
exchange rate of 360 naira to $1, a framework for its 2020-2022
spending plan.
The proposals require parliament's approval before being
signed into law by the president.
With global oil prices plunging, the government had said
this year's budget would shrink by about 15% and that it would
switch to domestic naira borrowings. However, Ahmed said on
Wednesday that the reduction amounted to just 71.5 billion naira
to "adequately respond to the COVID-19
pandemic". The coronavirus outbreak and an oil price plunge have
magnified headwinds in the Nigerian economy, which relies on
crude sales for government revenues, triggering a historic
decline in growth and large financing needs as well as weakening
the naira.
The government expects the economy, which recently recovered
from a 2016 recession, to shrink by 3.4% this year. Africa's most populous country recorded its first confirmed
coronavirus case in late February. There have been 4,787
recorded cases and 158 deaths out of 200 million inhabitants.
Ahmed said the budget would be financed from local and
foreign borrowings as well as proceeds of privatisation to the
tune of 5.36 trillion naira to plug the deficit. She did not
identify the assets to be sold.
International lenders include the International Monetary
Fund (IMF), which last month approved $3.4 billion in emergency
financial assistance for Nigeria, the World Bank, Islamic
Development Bank and Afrexim Bank, Ahmed said. (Writing by Chijioke Ohuocha and Alexis Akwagyiram
Editing by Mark Heinrich and Grant McCool)