UPDATED: Nigeria struggles to balance finances ahead of 2017 budget approval

    • Lawmakers resolve to pass new budget by May
    • Only 214 people in Nigeria pay tax over $65,000
    • OPEC nation experiencing first recession in 25 years

    ABUJA, March 30  – Nigeria’s parliament resolved to pass the 2017 budget more swiftly than last year and avoid a repeated delay of the spending plan being signed into law, the Senate said on Thursday, as the OPEC member struggled with its balance sheet.

    The budget must be agreed by lawmakers before it can be signed into law by President Muhammadu Buhari, who is facing rising criticism over his handling of Africa’s largest economy.

    Buhari presented his record 7.298 trillion naira ($23.2 billion) 2017 budget to lawmakers in December and returned to Nigeria from Britain in March after nearly two months of medical leave for an unspecified illness.

    The latest budget aims to pull Nigeria out of its first recession in 25 years, largely caused by low oil prices and attacks on energy facilities in its Niger Delta oil hub.

    Under pressure to find news sources of income, the government needs to control endemic corruption and a loose tax policy that allows many to gorge off Nigeria’s oil production, hide their wealth and avoid filling the public coffers.

    The Nigerian government said on its official Twitter account on Thursday that only 214 individuals in the entire country pay 20 million naira or more ($65,232) in tax annually.

    That low number does not reflect the riches amongst Nigeria’s population of more than 180 million, with no shortage of ultra-wealthy individuals sitting on some of the largest oil reserves in the world.

    The lack of taxation, one of the lowest rates in the world at just 6 percent of gross domestic product (GDP), has been a thorn in Nigeria’s side for decades. But the issue has come to a head in recent months as the government tries to secure loans of at least $1.4 billion from international lenders.

    Months of disagreements over the details of last year’s budget – passed in May 2016 – also deepened the economic crisis.

    Lawmakers had hoped to pass this year’s budget before the end of March, but on Monday the senator who chairs the budget committee said it was likely to be passed before May and last year’s budget remains valid until May 5.

    Late on Wednesday, the finance ministry said the accountant-general had issued a circular extending the tenure of capital spending projects outlined in the 2016 Budget until May 5 or the passage of the 2017 budget, whichever is earliest.

    The finance ministry this week said capital released to ministries and government agencies under the 2016 budget had reached a record 1 trillion naira ($3.3 billion).

    Nigeria released an Economic Recovery and Growth Plan (ERGP) for 2017 to 2020 in early March which called for an increase in taxation on luxury goods and a potential rise in value-added tax but economists have said that won’t be enough. ($1 = 305.4500 naira)



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