Economy

Oil’s rise gives Nigeria some good news after its budget gets delayed ... again

Key Points
  • Nigeria earned 557.9 billion naira ($1.8 billion) in gross revenues last month, up from 538.9 billion naira in January.
  • This was thanks to higher crude oil exports and prices, Ahmed Idris, the accountant general, said Thursday as reported by Reuters.
  • But, earlier this week, it was announced that Nigeria's annual budget announcement was to be pushed back yet again.
Motorists wait in traffic under banners bearing portraits of Nigerian President Muhammadu Buhari on March 29, 2018, in Lagos, Nigeria.
Pius Utomi Ekpei | AFP | Getty Images

Nigeria's state revenue for February of this year edged up by 19 billion naira ($53 million), it was announced Thursday, though chaotic fiscal management has meant that its budget announcement has been pushed back yet again.

Nigeria earned 557.9 billion naira ($1.8 billion) in gross revenues last month, up from 538.9 billion naira in January. This was thanks to higher crude oil exports and prices, Ahmed Idris, the accountant general, said Thursday as reported by Reuters.

But, earlier this week, it was announced that Nigeria's annual budget announcement was to be pushed back yet again.

Expected for April 24, the announcement will now come on May 31. This is not the first time the budget has been delayed. The Nigerian financial year runs from January to December, though last year's budget was also published in May.

Nigerian President Muhammadu Buhari initially presented the 2018 budget of 8.6 trillion naira to lawmakers in November but still needs approval. The sum is the country's biggest ever.

This comes as Nigeria moves past its recession of 2016, in which the country's economy shrank by 1.58 percent according to its National Bureau of Statistics. According to the International Monetary Fund (IMF), Nigeria — which is Africa's largest economy and easily the continent's most populous nation — will grow 2.1 percent in 2018.

"Rising oil prices, new foreign exchange measures, attractive yields on government securities, and a tighter monetary policy have made foreign exchange more readily available and helped contain inflation. Consequently, investors are returning to Nigeria," said the IMF earlier in March.

Nigerian President Muhammadu Buhari visits Ebonyi State in the south east of the country to commission projects on November 14, 2017.
next24online | NurPhoto | Getty Images

"The 2018 budget is not likely to be passed until May at the earliest. This is due to a combination of administrative inefficiency, competing priorities between the executive and legislature, and the need to intensely screen for corruption," Ben Payton, head of Africa research at consultancy Verisk Maplecroft, told CNBC via e-mail.

But, thanks to the existing limitations of the Nigerian state, the delayed budget may not be so impactful on the everyday lives of Nigerians, according to Philip Walker, a Nigeria analyst at research firm Economist Intelligence Unit.

"Fiscal revenue and spending is a tiny share of the economy and few Nigerians benefit from public services or infrastructure owing to a lack of investment and poor financial management. This latest budget delay highlights our long held forecast that policy implementation is unlikely to improve much in the coming years," he told CNBC via e-mail.