Nigerian president delays budget on spending dispute-source - CNBC Africa

Nigerian president delays budget on spending dispute-source

Western Africa

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President Goodluck Jonathan of Nigeria. PHOTO: Y Naija

A senior governemnt source told Reuters that Jonathan would not present the 2014 budget to the national assembly as planned because of a disagreement between his team and lawmakers over plans to curb spending.

Lawmakers indicated last month that they wanted to increase spending in the budget for next year, ahead of presidential and parliamentary elections in 2015. No new date has been fixed for the presentation, the source said.

Finance Minister Ngozi Okonjo-Iweala proposed curbing spending in a 2014 budget framework paper after the government spent almost $6 billion of oil savings this year to cover budget revenue shortfalls.

Economists however had said she would struggle to get the budget passed in parliament. 

A separate source in the national assembly said that lawmakers were unhappy with low capital expenditure, which they wanted to see increased to boost Africa's second-largest economy.

In addition, the House of Representatives and the Senate have both said they want a higher benchmark oil price assumption in the budget to free up more money for spending.

There were no state house security officials at the national assembly on Tuesday morning and a red carpet laid out for the president outside the House of Representatives had been removed, a Reuters witness said.

In the budget framework, Ngozi allocated outgoings of 4.5 trillion naira for 2014, against 5 trillion in 2013, but lawmakers usually increase spending and ask the executive arm of government to cover costs with improved revenue collection.

Budget disagreements often centred around the oil benchmark price, over which Africa's biggest crude exporter saves revenues from oil sales into the excess crude account (ECA).

In the 2014 budget plan document, the finance ministry set the oil benchmark price 74 US dollars a barrel.

The House of Representatives and the Senate last week each proposed amendments that would inflate the benchmark to 79 US dollars and 76.5 US dollars a barrel, respectively. Both moves, by increasing the price, would boost budget spending but reduce savings meant to shield the economy from oil price and production shocks.

The ECA only holds around 3.3 billion US dollars, compared with 9 billion US dollars in December last year.