Nigeria's budget minister Udoma Udo Udoma has said that the government will soon be pumping much of the $1.76 billion earmarked for capital projects this quarter into Africa's biggest economy in a bid to encourage growth.
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According to Reuters, this is part of efforts by the OPEC member to stimulate an economy that contracted by 0.4% in the first quarter of 2016, and which is seeing its deepest crisis in decades, as a result of declining crude prices. During May, Nigeria's central bank governor said a recession appeared "imminent".
Nigeria's $30.6 billion budget for 2016 was signed into law last month by President Muhammadu Buhari, and triples capital expenditure compared to 2015. The government intends to generate 3.38 trillion naira this year from non-oil sources, up from 1.81 trillion last year (an increase of 87%). But just how this will be achieved remains to be seen. The budget assumes oil production of 2.2 million barrels per day (bpd) at $38 per barrel, though production has fallen to a 20-year low of around 1.6 million bpd.
Udoma has called for government ministries, departments and agencies to "fast track" processes for the capital budgets releases so that the economy may be quickly reflated. He would like the impact to be seen by the third quarter of this year.
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