Nigeria Projects Dire Fiscal Situation Without Subsidy Removal
- Capital expenditure to be squeezed by rising cost of subsidy
- Budget deficit seen rising to almost three times revenue
Naira banknotes in Port Harcourt, Nigeria.
Photographer: George Osodi/Bloomberg
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Nigeria must cut gasoline subsidies and boost revenue collection to avoid a sharp deterioration in government finances next year, the nation’s budget office said.
The budget deficit may rise to 12.4 trillion naira ($29 billion) next year -- almost three times total revenue, or 5.5% of gross domestic product -- if the government continues paying fuel subsidies, according to a medium-term expenditure framework published on the office’s website. The subsidies will cost 6.72 trillion naira, it said.