Nigeria’s government will next week pump much of the 350 billion naira ($1.76 billion) earmarked for capital projects this quarter into Africa’s biggest economy, the budget minister said on Wednesday.
The spending is part of efforts by the OPEC member to stimulate an economy that contracted by 0.4 percent in the first quarter of the year. It is going through its deepest crisis in decades, brought on by the fall in crude prices.
In May, Finance Minister Kemi Adeosun said 350 billion naira would be injected into the economy “every quarter until we stimulate growth”.
“We expect … the Ministry of Works … [to] have quite a substantial release in the next week or so,” Budget Minister Udoma Udo Udoma told reporters.
The cabinet expects that various ministries, departments and agencies “should fast track processes for the release of the capital budgets so that the economy can be quickly reflated,” he said, adding that the impact would be seen “by the third quarter”.
Last month Nigeria’s central bank governor said a recession appeared to be “imminent”.
President Muhammadu Buhari signed the delayed 2016 budget into law last month. The record 6.06 trillion naira ($30.6 billion) budget triples capital expenditure compared with the previous year.
The government plans to generate 3.38 trillion naira this year from non-oil sources, up 87 percent from 1.81 trillion in 2015.
But with Nigeria’s heavy reliance on oil sales, which comprise about 70 percent of national income, it is unclear how this will be achieved.
The budget assumes oil production of 2.2 million barrels per day (bpd) at 38 dollars a barrel. But production has fallen to a 20-year low of around 1.6 million bpd following a wave of militant attacks on oil facilities in the last few months.