27 November 2012

Nigeria: Sanusi Canvasses Reduction of Budgetary Allocation to Recurrent Expenditure

Warri (delta State) — Malam Sanusi Lamido Sanusi, Governor, Central Bank of Nigeria (CBN), on Tuesday called for improvement of the nation's infrastructure for sustainable economic growth.

Sanusi made the call at the Second Annual Capital Market Committee meeting organised by the Securities and Exchange Commission (SEC) in Warri.

He said that less emphasis should be placed on allocations to recurrent expenditure in annual budgets.

The CBN governor spoke on "The Inter-relationship between the Money and Capital Markets".

He said that the country would not experience sustainable growth if 70 per cent of the Federal Government's budget was for recurrent expenditure and payment of salaries.

Sanusi said that government should review its spending patterns to place emphasis on capital projects in critical sectors of the economy.

"We cannot continue spending money on recurrent expenditure and blowing up our savings," he said.

Sanusi said that no economy would grow without building its real sector, adding that CBN was committed to economic stability.

He attributed the high interest rates on bank loans to the infrastructural challenges confronting Nigeria.

The apex bank governor also said that the high interest rates were due the monopoly banks enjoyed as the only source of credit in Nigeria.

He advised capital market operators to strengthen long-term funding, adding that there was the need for confidence building to encourage long-term investments.

Sanusi promised that the CBN would continue to partner with SEC in the area of nurturing investors.

Mr Oscar Onyema, Chief Executive Officer of Nigerian Stock Exchange (NSE), said that transparency would improve business potential of the NSE.

Onyema said that the Exchange would continue with its investor advocacy strategy to boost investor confidence and raise the level of participation in the market.

Onyema spoke on the topic "Taking the Market to the Next Level".


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