UPDATE 2-Nigeria's parliament passes record 10.59 trillion-naira budget for 2020

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By Camillus Eboh
ABUJA, Dec 5 (Reuters) - Nigeria's parliament passed a
record 10.59 trillion naira ($35 billion) budget for 2020 on
Thursday, paving the way for a likely return to the
international debt market next year as the country struggles to
shake off the impact of a recession.
The budget passed by lawmakers assumes a deficit of 1.52% of
the estimated gross domestic product - representing around 2.18
trillion naira - to be financed through foreign and domestic
borrowing.
In 2019, the debt office said it did not tap the
international debt market because of time constraints before the
end of its budget cycle. The West African country held its last
Eurobond sale in 2018, its sixth outing, where it raised $2.86
billion. Nigeria emerged from a 2016 recession the following year but
has struggled to boost growth. Ratings agency Moody's downgraded
the country's outlook to negative from stable on Wednesday,
citing an increased risk to government revenue.
The plan was passed by the Senate, parliament's upper house,
followed by the lower house a few hours later.
The budget assumes crude production of 2.18 million barrels
a day and an oil price of $57 per barrel. Nigeria is Africa's
top oil producer.
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, the 9.12
trillion-naira budget for 2018.
Buhari last week asked parliament to approve a request for
$23 billion in foreign borrowings for infrastructure projects.
It was not immediately clear if that sum was included in the
budget passed by lawmakers on Thursday.
A central goal of his tenure has been to increase non-oil
revenues to reduce Nigeria's dependence on crude oil sales.
In Buhari's first term, the executive was embroiled in a
power struggle with the legislature, leading to months of delays
in the implementation of spending plans.
But loyalists in his ruling party now occupy key
parliamentary roles, which has sped up the passage of
legislation.
"I hope we continue to work together as colleagues to ensure
the 2020 budget is fully implemented," said Senate President
Ahmed Lawan after passing the budget.
Lawmakers increased the budget from the 10.33 trillion-naira
spending plan that Buhari presented them in October. The
president must agree to the revised plan before signing it into
law.