April 22, 2010 / 10:26 AM / 9 years ago

Nigeria's acting president approves $31 bln budget

Nigeria's Acting President Goodluck Jonathan attends the "India-Africa Forum Summit 2008" in New Delhi, April 9, 2008. REUTERS/B Mathur

ABUJA (Reuters) - Nigeria’s acting president on Thursday signed into law a 4.6 trillion naira budget for 2010, with more than a third earmarked for the development of roads, power and the oil-rich Niger Delta.

The budget increases expenditure by 50 percent from last year as Nigeria tries to spend its way out of a downturn, but it also risks pushing the OPEC member to a budget deficit of more than 5 percent.

“It is with a deep sense of responsibility that I sign the 2010 budget for the acceleration of development in our country,” Jonathan said at a signing ceremony in the capital Abuja.

Analysts have welcomed the government’s move to boost the economy but cautioned the quality of spending would be key, given Nigeria’s reputation for inefficient budget implementation.

“The most important thing for us is to make sure that in spending we get good value for the money spent,” said Finance Minister Olusegun Aganga.

The budget includes 1.85 trillion naira for capital expenditure and 2.077 trillion naira for recurrent, non-debt expenditure.

The budget assumes an average oil price of $67 per barrel and oil production of 2.35 million barrels per day. It is based on an exchange rate at 150 naira to the dollar, an inflation rate of 11.2 percent and growth of 5.47 percent.

Nigeria expects to fund the budget deficit with around 897 billion naira in domestic borrowing, 132 billion naira from a planned oil licensing round, and 75 billion naira from its planned debut global bond.

Nigeria’s total public debt as of December 31, 2009, was estimated at 3.81 trillion naira, or around 14 percent of GDP, according to the Debt Management Office.

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