Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.


IMF advises Nigeria on prudent spending

01 November 2012, 16:04

Abuja - The International Monetary Fund (IMF) says the Federal Government needs to curtail spending to avoid putting pressure on the crude oil benchmark.
Mr Scott Rogers, IMF’s Senior Resident Representative in Nigeria, gave the advice while briefing newsmen on the Regional Economic outlook in Abuja on Thursday.

``Higher benchmark price most often determines how much of the oil revenue gets distributed; if oil revenue gets distributed, it doesn’t mean you have to spend it.
``So, generally raising the budget reference price means more money gets distributed to the different tiers of government, and what it then means is these governments can spend the money.
``And if you spend the money, then again you have the adverses on the economy because you have government paying salaries, buying vehicles, gas and all these put pressure on price rates.”

 According to him, if the prices go up, the only way the Central Bank can reduce it will be by strengthening the monetary policy.
He said that the only way to do that would be to reduce government spending, saying that the best mechanism to curtail spending was through the budget reference price of oil.
``The lower the budget reference price of oil, the lower government spending; assuming that you actually save the difference; which means, you don’t put it in the Excess Crude Account and take it back out again; you put it the Excess Crude Account and you leave it there.
``And that’s the way it was designed and that is the only way it really has an impact.’’
The 2013 budget has an oil benchmark of 75 dollars per barrel, but the House of Representatives wants it pegged at 80 dollar per barrel.
On the regional outlook, he said the region still retained robust growth outlook, but noted that there was the need to monitor the uncertain disposition of the global economy.
He said that Nigeria still had fair positive economic outlook, adding that in summary, the forecast for 2012 to 2013 showed strong but declining Gross Domestic Product (GDP).
Rogers identified lower oil prices due to weak global economy as one of the three major risks to positive outlook.
He said the other two major risks were excessively high budget reference price of oil leading to higher government spending as well as premature easing of monetary policy to bring down nominal interest rates before inflation battle is won.
He called for effective management of the macroeconomic policies especially with the generated fiscal surplus while the oil price remained high.
This, he said, would help reduce inflation and interest rates and rebuild government savings to guard against future crises.
He advocated increased public investment to make oil price rule effective and keep short-term interest rates above inflation.


Tags cbn imf

Read News24’s Comments Policy

Comment on this story
Comments have been closed for this article.

Read more from our Users

Nigeria @ 56: Words to my green f...

A leader’s job is not to dictate, but rather to be respected, admired and be a trustee, of the land we love, with so much potential, a land which should be freer than free. Its still a long way to fufilling our destiny! Read more...

Submitted by
Isaac Asabor263
Recession: An opportunity for Nig...

The recession should be seen as an opportunity for the country’s promotion as long as we all collectively conduct ourselves in a patriotic manner, writes Isaac Asabor.  Read more...

Submitted by
Black and White

We want to imitate the whites in everything because we are ignorant of our inherent originality and content. We spend all our Naira to acquire his inventions because we so oblivious of our natural endowments that we allow him have it for free. Read more...

Submitted by
Nate Nat
Adamawa State University Mubi: A ...

ADSU integrity forum has accused the Sunday Joshua Wugira, a lawyer, of adopting unorthodox tactics by abusing his privilege by attacking the integrity of ADSU Vice Chancellor Dr. Moses Zira Zaruwa, writes a News24 reader. Read more...

Submitted by
Abdulsalam Jubril
My Country Nigeria (Part One)

Poetry by Abdulsalam Jubril.

Submitted by
Abdulsalam Jubril
Recession, dearth in leadership a...

Every leader has the opportunity to become great and making himself immortal in the lives and hearts of people for generations to come. Will Mr. President seize this opportunity?, questions Abdulsalam Jubril. Read more...