National Assembly passes reduced 2011 budget

Details: Category: Politics; Published on Wednesday, 25 May 2011 20:32; Written by Admin; Hits: 1019

(Reuters) - Nigeria's parliament passed a revised 2011 budget on Wednesday, trimming its spending plans from a version lawmakers proposed two months ago that President Goodluck Jonathan refused to sign into law.

The Senate and House of Representatives agreed on a 4.484 trillion naira budget, down from their previous 4.972 trillion naira proposal. It will now be sent to Jonathan for his approval.

Jonathan originally proposed a 4.226 trillion naira budget in December but lawmakers sent back an inflated plan three months later.

The Senate said the revised budget included recurrent expenditures of 2.42 trillion naira and capital spending of 1.14 trillion naira, meaning Africa's most populous nation is spending more on keeping the government running than on badly needed infrastructure.

The government has said the budget is supposed to mark a period of fiscal consolidation in sub-Saharan Africa's second-biggest economy, but Finance Minister Olusegun Aganga described the lawmakers' first version as "unimplementable".

Central Bank Governor Lamido Sanusi has repeatedly warned of the damage loose fiscal policy could do to the economy of Africa's biggest crude exporter.

On Tuesday, the central bank unexpectedly raised its key interest rate to 8 percent and doubled lenders' cash reserve requirements in an effort to curb inflation and ease pressure on the local naira currency.

The proposals for high public spending were highlighted as a major factor in the decision to tighten monetary policy again.

Jonathan will be inaugurated on Sunday after winning' a presidential election last month which observers said was the fairest the country had held in decades.