Abuja | Wednesday
NIGERIAN President Olusegun Obasanjo is to present on Wednesday his 2002 budget proposals to parliament, unveiling scaled back spending plans in the wake of recent falls in the price of oil.
Obasanjo will announce spending plans for the next calendar year of 844-billion naira ($7,6-billion), sharply lower than the combined total of 1,026-trillion naira approved for 2001, his office said.
The cutting back in the government’s spending plans reflects concerns about the price of oil, which accounts for 95% of Nigeria’s foreign exchange earnings.
The last budget was built on expectations of an average price of $22 per barrel, but the budget for 2002 will be based on an expected price of $18 a barrel, officials said last week.
In the oil markets on Tuesday, the benchmark price of a barrel of Brent North Sea crude fell to just under $19 a barrel, the lowest price since July 1999 and down from highs of over more than $30 a barrel shortly after the September 11 terror attacks in the United States.
Earlier this week, newspaper reports said the country’s foreign reserves had fallen to $10,38-billion from $10,55-billion in August because of the fall in oil prices.
The International Monetary Fund earlier this year blamed what it called unsustainably high government spending for inflation which stood in August at 18,1%.
Meanwhile, the newspaper This Day said on Tuesday that the largest item in the 2002 budget would be spending on the military, with the defence budget standing at 49,6-billion naira.
In this poverty-stricken country of more than 120-million people, the military has for years accounted for the largest share of government spending.
But, according to most military analysts, the military has little to show for the funds it receives because much of the money is siphoned off into private pockets.
The defence spending in 2002 proposed by Obasanjo will be slightly more than the 48,4-billion naira to be spent on education and more than twice the 24,3-billion naira to be spent on health, This Day reported.
Officials were not immediately available to confirm the spending break-down. – AFP