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Sanusi Advocates Budget Cuts to Reduce Unnecessary Recurrent Expenditure

By on November 28, 2012

The dynamic, vocal and innovative Governor of the Central Bank of Nigeria Mr Lamido Sanusi has made an emphatic call for the reduction of budget allocation to recurrent expenditure, stressing it is inimical to the sustainable economic growth of the nation.

This statement is coming at a time when several Nigerian economists and advocacy groups have made  strong cases for the National Economic Intelligence Team to review the Nigerian budget trends and  increased allocation to recurrent expenditure.

Governor Sanusi made the call at the Second Annual  Capital market committee meeting in Warri, Delta State organized by the Security  and Exchange Commission.

He said less emphasis should be placed on allocation to recurrent expenditure in the annual  National budgets. Speaking on the topic “The Inter-Relationship between Money and Capital Markets” warned that the country will not experience growth if 70% of the budget goes to recurrent expenditure and payment of salaries.

The conference which was monitored by BusinessDay Newspapers had stakeholders in the Nigerian Financial sectorin attendance  brainstorming on the pathway for Nigeria’s economy.

Sanusi said “we cannot continue spending money on recurrent expenditure and blowing up our savings,” stressing  that no economy would grow without building its real sector, adding that CBN was committed to economic stability.

The apex bank governor also said that the high interest rates were due the monopoly banks enjoyed as the only source of credit in Nigeria.

He advised capital market operators to strengthen long-term funding, adding that there was the need for confidence building to encourage long-term investments.

Sanusi promised that the CBN would continue to partner with SEC in the area of nurturing investors.

Mr Oscar Onyema, Chief Executive Officer of Nigerian Stock Exchange (NSE),speaking also at the conference said that transparency would improve business potential of the NSE.

Onyema said that the Exchange would continue with its investor advocacy strategy to boost investor confidence and raise the level of participation in the market.

If Government takes the Central Bank Governor’s statement on Budget allocation to recurrent expenditure seriously, and makes necessary effort to review it with a view to making necessary adjustments, Nigeria should enjoy relative economic stability.

One Comment

  1. Ab Imodu

    November 28, 2012 at 11:13 pm

    The CBN main Man is just saying the fact from economic point of view because any economy in the world that is not productive, research and infrastructural driven will always have issues with her yearly budget and sustainable growth which always lead to persistent development any country can achieve. Therefore Nigeria economy should diversify and productive in nature. If you are an economist you need not to be told because our leader are so brain dead, they do not even plan for the next hour.