Aganga worried by 2011 expansionary budget

Nigerian Finance Minister, Olusegun Aganga, said on Wednesday he was concerned about the high level of borrowing in the 2011 budget passed last week and would be taking up the issue with parliament.

Parliament last week passed a N4.972 trillion 2011 budget, higher than President Goodluck Jonathan’s initial N4.226 trillion proposal three months ago.

“The 2011 budget is supposed to signal the beginning of fiscal consolidation, but we now have another expansionary budget which is unimplementable,” Aganga said in comments forwarded by his office.

“If we are to build our economy on a solid foundation and avoid the boom and bust of the past, it is critical that we embrace discipline in the way we manage public finances. We cannot continue like this.”

More than half of the planned spending is earmarked for recurrent expenditure, meaning Africa’s most populous nation is spending more on keeping government running than on needed new infrastructure and development projects.

The Central Bank of Nigeria (CBN) raised its benchmark interest rate by a surprise full percentage point to 7.5 per cent on Tuesday, partly in a bid to ward off the effect of rising government spending ahead of elections next month.

Analysts have voiced concern about the state of Nigeria’s public finances in the run-up to April’s presidential, parliamentary and state governorship polls, after foreign currency reserves dwindled and oil savings were all but spent.

Aganga said the finance ministry was yet to receive full details of the budget from parliament but that, based on information available so far, there were “areas of concern” including the deficit and borrowing levels.

“I will be advising that we engage with the National Assembly to resolve these areas of concern,” he said.

“We have always had a very good relationship with the relevant National Assembly committees. So, I am optimistic that we can resolve these areas of concern very quickly.”

Source : Tribune