Nigeria’s Senate approved a budget of 4.49 trillion naira ($22.5 billion) for this year on Tuesday, joining the House of Representatives which has already agreed to the spending plan.
The budget for this year is 4.5 percent lower than 2014’s planned 4.7 trillion naira as Nigeria, a member of the Organization of the Petroleum Exporting Countries, seeks to compensate for lower crude prices. That amount rose to 4.96 trillion naira with the addition of 268 billion naira in savings from the reduction of fuel subsidies.
Nigeria is basing its plans on an average crude price of $53 a barrel this year, David Mark, president of the upper house, said in the capital, Abuja. That’s down from a benchmark price projected at $77.5 a barrel last year. Domestic production is seen at 2.28 million barrels a day, down from an last year’s assumed 2.39 million barrels a day.
Africa’s biggest crude producer and economy is struggling to deal with a 40 percent drop in the price of crude since June, sales of which finance about 70 percent of government spending. Its currency, the naira, is seen trading at 190 to the U.S. dollar in 2015, according to the budget.
The naira has lost 17 percent of its value versus the dollar in the past six months, making it the worst-performing of 24 African currencies tracked by Bloomberg. It traded at 199.18 to the dollar at 2:33 p.m. on Tuesday in Lagos, the commercial capital.
The budget must be signed by Goodluck Jonathan, the outgoing president, for it to become law. Jonathan lost a March 28 presidential election to Muhammadu Buhari, who is due to be inaugurated on May 29.