FG Proposes Constricted Budget In 2012 - Okonjo-Iweala
The Federal Government of Nigeria has proposed that next year's budget will be fairly tight to curtail current expenditures hence the country's recurrent expenditure has trailed beyond 60 per cent above capital.
Minister of Finance, Dr. Okonjo-Iweala made the revelation on Thursday at a presidential roundtable talk with top business leaders in Burwood, Australia on the need for foreign experts to invest in Nigeria.
According to the Finance Minister, 'This morning, I was listening to Australian Treasurer giving a press conference on TV and I felt he sounded like me because he touched what I would like to say here. That is in two parts.
'The first is that the world's economy is obviously in a very difficult state at the moment with what is happening in Europe, the debt crisis and what is happening in the United States.
'What this means for us is that we have to drive towards sources of growth for our own economy. We have to work doubly hard in order to drive our own economy not just depending on external finance but also on internal finance. That means we have to work hard to make domestic investments and domestic consumption to work harder for us. So, that is one piece of news.
'The good news is that we have the capacity to do that. I think we have been having fairly robust growth and what we will like to do, with the President having really made his own mark, is to turn that growth to job creating growth. That is what we are focusing on.
'And the other good news about Nigeria is first our fiscal situation. We have now gone on a path of fiscal consolidation, which is what we need at the moment. We want to give confidence to the business community that we are going to manage our finances from.'
Okonjo-Iweala, who explained that the budget might be fairly tight with the likelihood of scaling down domestic debt, said 'We are putting together a budget that is fairly tight. We are looking at a fiscal deficit of three per cent or less and we are going to maintain that over a medium term.
'We are looking at increasing investment in the economy and curtailing the current expenditures to a reasonable level. We are looking at scaling down domestic debt and holding debt at a reasonable level.
'At this point, I must say that one of the good things we have got going for us is our debt-Gross Domestic Product ratio of 20 per cent which is probably one of the lowest around the world and that gives us plenty of room particularly on the external debt side where we have about 3-4 per cent to GDP ratio.
'I think we are reasonably in good shape once we can maintain the fiscal. And you see what has happened at the monetary policy side as the Central Bank of Nigeria (CBN) has responded to make sure that the exchange rate is kept stable. The exchange rate has increased sharply but I am sure we will be able to bring it down lower over time because we realised what it means for the real sector to be able to borrow,' Okonjo-Iweala disclosed