Sanusi cautions against increased spending in 2014

The Governor, Central Bank of Nigeria, Mr. Lamido Sanusi, has urged the government to be prudent in the management of the nation’s resources in 2014.

The governor, in a statement issued on Monday, however, said the reduced spending pattern in the current fiscal year was commendable.

He noted that the Federal Government’s overall spending in 2013 had not been significantly higher than it was in 2012 due to tight controls in spending in the second half of the year.

The situation, he pointed out, had helped in moderating the rate of inflation in the country, bringing it down to a five-year low.

He noted that with the trend, it hoped the stability anchored in key macroeconomic indicators such as inflation, exchange and interest rates, would be sustained.

He, however, urged caution in future spending owing to the decline in oil revenue.

The CBN governor expressed concern about the challenge of loss of revenue from oil exports and advised the financial authorities to block fiscal leakages in the oil sector and increase oil revenues.

In anticipation of public spending ahead of the 2015 elections, Sanusi noted that politicians the world over tended to spend money in election years.

He, therefore, did not rule out the possibility of a supplementary budget.

According to him, although the 2014 budget as proposed to the National Assembly shows prudence, a supplementary budget will portend a risk to the hard-earned stability.

Sanusi said the CBN was ready to use its monetary policy tools to respond appropriately and ensure that the naira remained stable, just as inflation would be kept under control.

The CBN last week in a bid to check excessive pressure on prices owing to the 2015 general elections, announced a tight monetary policy stance for the 2014 fiscal year.