* Budget proposal assumes $57 per barrel oil price
* Spending plan sees 2.18 mbpd oil production
* Analyst warns actual spending may "deviate dramatically"
* Budget includes VAT rise to 7.5% from 5%
(Adds details, quotes, bullet points, analyst)
By Camillus Eboh
ABUJA, Oct 8 (Reuters) - Nigerian President Muhammadu Buhari
presented a record 10.33 trillion-naira ($33.8 billion) budget
for 2020 to lawmakers on Tuesday as he aims to spur growth in
Africa's largest economy at the start of his second term in
office.
The plan for Africa's top oil exporter assumes crude
production of 2.18 million barrels a day and an oil price of $57
per barrel, although an analyst said the budget implementation
may "deviate dramatically" from the figures unveiled. O/R
Nigeria emerged from its first recession in 25 years in
2017. Growth is still sluggish, although higher oil prices and
recent debt sales have helped the country to accrue billions of
dollars in foreign reserves.
Buhari told lawmakers at a joint session of the upper and
lower chambers of parliament that the "economic environment
remains challenging" but said the budget was expected to
increase the pace of growth.
"The 2020 budget is expected to accelerate the pace of our
economic recovery, promote economic diversification, enhance
competitiveness and ensure social inclusion," said Buhari, who
won an election in February and began his second four-year term
in May.
He has repeatedly stated his desire to boost non-oil sources
of revenue since crude oil sales make up around 90% of foreign
exchange. Low prices were the main reason for the economy's
slide into recession in 2016.
Economic growth slowed to an annual rate of 1.94% in the
three months to the end of June, the second quarter in a row of
decline.
"We are optimistic of attaining higher and more inclusive
GDP growth," Buhari said.
The spending plan, which includes a value-added tax increase
from 5% to 7.5%, is up from the 8.83 trillion-naira budget for
2019 and tops the previous record spending plan which was the
9.12 trillion-naira budget for 2018.
ROAD AND RAIL
Buhari's government has repeatedly rolled out record
spending plans but struggled to fund them because of lower oil
production and an inability to boost non-oil exports.
Actual revenue collection and budget implementation are
likely to "deviate dramatically from the administration's
plans", said Malte Liewerscheidt, vice president of Teneo
Intelligence.
Buhari, who in his re-election campaign vowed to implement a
road and rail construction programme, said 2.46 trillion naira
had been allocated to capital projects and 2.45 trillion naira
for servicing debts.
A budget deficit of 2.18 trillion naira - representing 1.52%
of the estimated gross domestic product - was to be financed
through foreign and domestic borrowing, plus the proceeds of
privatisation, he said.
The president said he would seek the support of lawmakers to
pass two petroleum bills into law.
And he said he would resubmit a bill sent to parliament in
2018, which was not passed into law, that would review the
fiscal terms for deep offshore oil fields.
"We estimate that this effort can generate at least 500
million U.S. dollars additional revenue for the federal
government in 2020, and over 1 billion dollars from 2021," he
said.
Nigeria's government is already in court with several
international oil majors claiming "colossal" sums of money that
it says it should have been paid under that law.
The budget must still be approved by parliament before being
signed into law by Buhari, a process that can take months.