Nigeria - President Jonathan Faces Showdown Over 2013 Budget
https://nigeriaafrica1.blogspot.com/2012/10/nigeria-president-jonathan-faces.html
Nigeria's President Goodluck Jonathan on Wednesday presented a 4.93 trillion naira budget to parliament for 2013, but lawmakers immediately disputed it, calling for a formula that would put less oil cash in the savings pot.
Jonathan's proposal increased spending by 5 percent from this year's 4.697 trillion naira, but shrunk the deficit and cut the share taken by recurrent expenditure.
The plan saw the fiscal deficit coming down to 2.17 percent of GDP, from 2.85 percent previously, assuming the economy grows at 6.5 percent, he said -- a lower projection than this year's expected 6.85 percent growth.
Africa's second biggest economy and top oil producer is growing as an investment destination, offering enviably high economic growth and a huge consumer market from a 160 million population. It's sovereign debt has soared since JP Morgan added it to its emerging market bond index this month.
But investors remain wary of the government's tendency to squander its oil windfall on reckless spending or corruption.
The budget assumed 2.53 million barrels per day (bpd) oil output, up slightly from 2.48 million bpd this year, and a global oil price of $75 a barrel, up from $72 a barrel in 2012.
Signalling an impending showdown over the bill, parliament's speaker Aminu Tambuwal said the house had proposed to inflate cabinet's oil price assumption in the 2013 budget to $80 barrel, triggering cheers from fellow legislators.
Money earned from oil over the benchmark price is deposited into a savings mechanism called the Excess Crude Account (ECA). Any increase in the benchmark price will therefore reduce savings and make Nigeria less resistant to oil price shocks.
Finance Minister Ngozi Okonjo-Iweala is on an austerity drive and wants Nigeria to be more fiscally prudent with its oft-squandered oil windfall.
But lawmakers, who have been grumbling about delays in their allowances in the execution of the 2012 budget, were in no mood to accept such a slight increase in the benchmark.
In past such disagreements parliament usually wins.
The plan saw the fiscal deficit coming down to 2.17 percent of GDP, from 2.85 percent previously, assuming the economy grows at 6.5 percent, he said -- a lower projection than this year's expected 6.85 percent growth.
Africa's second biggest economy and top oil producer is growing as an investment destination, offering enviably high economic growth and a huge consumer market from a 160 million population. It's sovereign debt has soared since JP Morgan added it to its emerging market bond index this month.
But investors remain wary of the government's tendency to squander its oil windfall on reckless spending or corruption.
The budget assumed 2.53 million barrels per day (bpd) oil output, up slightly from 2.48 million bpd this year, and a global oil price of $75 a barrel, up from $72 a barrel in 2012.
Signalling an impending showdown over the bill, parliament's speaker Aminu Tambuwal said the house had proposed to inflate cabinet's oil price assumption in the 2013 budget to $80 barrel, triggering cheers from fellow legislators.
Money earned from oil over the benchmark price is deposited into a savings mechanism called the Excess Crude Account (ECA). Any increase in the benchmark price will therefore reduce savings and make Nigeria less resistant to oil price shocks.
Finance Minister Ngozi Okonjo-Iweala is on an austerity drive and wants Nigeria to be more fiscally prudent with its oft-squandered oil windfall.
But lawmakers, who have been grumbling about delays in their allowances in the execution of the 2012 budget, were in no mood to accept such a slight increase in the benchmark.
In past such disagreements parliament usually wins.
