May 18, 2011 / 4:24 PM / 8 years ago

UPDATE 2-Nigerian finmin expects to agree budget by Friday

* Govt in talks over parliament’s inflated budget plan

* President Jonathan will need to enact agreed bill

* Current administration ends on May 29

(Adds political impact)

By Felix Onuah

ABUJA, May 18 (Reuters) - Nigeria’s government is expected to agree an amended 2011 budget with parliament by Friday, the finance minister said, a version likely to have tighter spending plans than the proposal lawmakers set out last month.

Once both houses of parliament are happy with the budget it will be sent to President Goodluck Jonathan for assent.

“The executive and the national assembly have been engaging on the budget in the last two weeks trying to come out with a budget that is workable and that both are happy with,” Olusegun Aganga told Reuters following a weekly cabinet meeting in Abuja on Wednesday.

“We are getting to the stage of finalising it now. If things move as we expect by Friday it should be ready.”

Nigeria’s government began negotiations with parliament after lawmakers inflated Jonathan’s initial 4.226 trillion naira ($27.32 billion) 2011 spending plan drawn out in December, passing a 4.972 trillion naira version three months later.

Government has said the budget is supposed to mark the beginning of a period of fiscal consolidation in sub-Saharan Africa’s second biggest economy but Aganga described the amended version, which would have pushed the deficit to over four percent, as “unimplementable”.

He vowed in March to take the issue up with parliament.

Presidential, parliamentary and state governorship elections last month disrupted the pace of negotiations, raising doubts that the budget could be passed before the end of the current administration on May 29. Aganga was keen to allay any fears.

“We are committed to resolving the issue of the budget and its signing during the life of this administration.”

More than half of the planned spending in the version passed by parliament is earmarked for recurrent expenditure, meaning Africa’s most populous nation is spending more on keeping government running than on badly needed infrastructure.

Analysts had voiced concern about the state of Nigeria’s public finances in the run-up to April’s elections after foreign currency reserves dwindled and oil savings were eroded.

President Jonathan is due to be sworn in for a new term on May 29 and will name a new cabinet following presidential, parliamentary and state governorship elections last month.

Aganga announced on Tuesday the successful passage of a bill to create a sovereign wealth fund, arguably his biggest single achievement in his time as finance minister. [ID:nLDE74G1RP]

If budget negotiations are concluded smoothly it will give his profile another boost as Jonathan decides which ministers to retain and which to replace in his new cabinet.

Writing by Joe Brock; editing by Ron Askew

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