7 October 2007
Lagos — Minister of State for Finance, Mr. Remi Babalola has revealed that plans are underway to introduce an appropriate fiscal policy to separate public expenditure from oil revenue.
A statement by the minister's Press Secretary, Mrs Modupe Ogundoro said the declaration was made in London at a Nigerian-British Chamber of Commerce Investment Conference entitled: "Opportu-nity Nigeria ".
"Nigeria's revenue volatility is directly correlated to its dependence on oil proceeds for the bulk of its fiscal revenues, with over 80 per cent of all federally-collected revenues related to oil," he said.
Babalola said the nation's over-dependence on oil had complicated its monetary and exchange rate policies.
He said the volatility of oil prices had adversely affected the real growth rate of Nigeria's GDP by inhibiting investment and productivity, and reducing public and private investments.
The minister, however, expressed satisfaction that the improved implementation of fiscal and monetary policies had provided a stable macro-environment, with rising private-public sector partnerships.
"The private investment rate will be increasing through a combination of macro-economic stabilisation, financial sector deepening, improved governance and more openness to trade.
All oil revenue windfall will be saved while shortfall will be met by expenditure reductions until foreign assets reach adequate level", he said.
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