Nigerian President Defers Budget Presentation to Parliament

Nigerian President Goodluck Jonathan postponed his budget presentation in parliament for the second time after lawmakers failed to agree on the benchmark oil price that helps establish the level of spending.

While the government proposed to set the oil price at $74 a barrel in its medium-term spending plan, the Senate and House of Representatives want to factor in higher prices, between $76.50 a barrel and $79 a barrel, to boost government spending.

“It is unfeasible for me to present the budget in the absence of a harmonized position,” Jonathan said today in a letter to the Abuja-based parliament. “In the circumstance, it has become necessary to defer the presentation of the 2014 budget until such a time when both respected chambers would have harmonized their positions.”

Jonathan signaled his intent to cut proposed expenditure by 10 percent next year to 4.5 trillion naira as crude output missed targets, according to the medium-term budget plan released in September. The cut would come a year before presidential elections scheduled for 2015, which Jonathan has not yet said whether he plans to contest for a second term.

Africa’s most populous country with more than 160 million people relies on crude exports for about 80 percent of government revenue and 95 percent of foreign-currency earnings.

The continent’s top crude producer saves oil revenue above the benchmark oil price in the Excess Crude Account and uses it to plug income shortfalls caused by oil price volatility or output shocks.

Finance Minister Ngozi Okonjo-Iweala said last month that theft of crude as well as output interruptions in the country’s Niger River delta oil heartland may result this year in the government’s proceeds from oil falling as much as $12 billion below budget estimates.

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