The Governor of the Central Bank of Nigeria, Mr. Lamido Sanusi, has cautioned the Federal Government against excessive spending on military operations in three states in the North-East, Borno, Adamawa and Yobe, where a state of emergency was declared last week.

Sanusi, while addressing journalists shortly after the end of a two-day Monetary Policy Committee meeting held at the CBN headquarters in Abuja, argued that excessive spending on military operations posed a major risk to the inflation outlook.

Headline inflation increased from 8.6 per cent in March to 9.1 per cent in April, remaining within the target single digit range for the fourth consecutive month in 2013.

The figure, according to the central bank boss, reflects a combination of base effect and the success of tight monetary policy, which have led to a muted growth in the monetary aggregates and exchange rate stability.

He said while the principal risks to the inflation outlook remained fiscal spending and possible pressures on the exchange rate from any attrition to reserves caused by declining revenues as a result of output leakages, there was the need for prudence in monetary policy action.

Sanusi said, “The committee noted with caution the high Gross Domestic Product growth projection in view of the extant risk factors such as widespread insecurity, weak infrastructure and probable flooding from the projected heavy rains in some parts of the country.

“The state of emergency in the North-East and the accompanying military operations in that axis have the potential to adversely affect economic activities generally, including agricultural production and food prices as well as consumer demand.

“In addition, the recent military action in the North-East will result in additional spending. Although the government has announced that there will be no supplementary budget, the Coordinating Minister for the Economy and Minister of Finance has already announced that there will be a drawdown on a contingency vote embedded in the 2013 budget to cover emergencies.

“Overall, the committee is of the view that government spending will constitute a major risk to the inflation and exchange rate outlook, thus advising prudence in monetary policy action at this time.”

The CBN governor also said the committee expressed concern over the low level of credit growth to the private sector and traced this to the crowding out effect of high growth in credit to the public sector.

He said, “The committee noted the N1.02tn increase in claims on the government and the N1.11tn drawdown on savings between January and April 2013, and particularly, the monetisation of $1bn in April 2013, being proceeds of the Excess Crude Account.

“The combined effect of new borrowings and reduced savings was an increase in net credit to the central government of over N2tn in the first four months of 2013. The evidence points to an increase in the rate of government expenditure in 2013 when compared with 2012.”

On the country’s external reserves, Sanusi expressed satisfaction with its significant increase to $49.13bn as of May 16, 2013.

This, he noted, represented an increase of $5.3bn or 12.1 per cent above the level of $43.83bn at the end of December 2012.

The reserves level, he added, could finance approximately 13 months of import.

On the Monetary Policy Rate, the governor said the committee left it unchanged at 12 per cent.

It also retained the Cash Reserve Requirement at 12 per cent and Liquidity Ratio at 30 per cent; with the Net Open
Position at 1.0 per cent.





Source http://www.punchng.com/news/dont-overspend-on-military-operations-sanusi-warns-fg/

He might be saying the truth, but he is a big time islamic terrorists apologist

Rubbish analysis! Is he saying that war should have no cost. Whats inflation compared to boko haram terrorism of innocent people?

Why is he making unnecessary comments on national issues even when he's no expert? Does he know anything about specialization?

Overspend?
Military expenditure as percentage of GDP,
Nigeria
www.google.com.ng/publicdata
1% of GDP - 2011
Source: World Bank

The truth is I never trust this man...whatever I say might not be objective.

With sound economic management and the good price we are getting for oil at the moment...there shouldn't be much worry.

Nigeria did it on a much more bigger scale for almost three years without any borrowing nor inflation that he is getting worried over...besides, this is a period he is employed for...managing the economy very well in abnormal times.

Sanusi should please tell how the government overspends in military operations. Whatever it costs to get the job done so be it!

Whatever would bring peace to the North,whether overspending or underspending must be carried out.
The North would pay back don't worry!!!

Mallam Sanusi, is it your money?

It dosn't matter if they overspend to curb these devilish Bokoharam.
Afterall the money they are going to spend will in no way measure up to the money
that have been looted by our politicans .
The most important thing is to get the job done .

Boko Haram financial secretary that obtained a degree from Sudan, lord deliver nigeria from the hands of terrorist.

No amount is too big to buy peace.

u have no point is becoz of ur selfish interest

Sanusi is sounding like a terrorist. I suspect that man

i wonder which 1 is more expensive....the cost of going to war against militia insurgents or cost of continuous rebuilding of destroyed states by militants?

This Sanusi is up to something...that's for sure

Boko haram chairman,Board of trustees speaking...am not surprised at all..

www.This nigger is mad O°. Daz all

Mallam Sanusi is a big fool, and a religious propagandist. He shud shut the Bleep up

Tell that to George W. Bush, bro. We are talking peace you are talking nonsense! Thank God you discovered education, you may have been up there with Abubakar Shekau.

Over spending now? He should go and try explaining that to those who lost a loved one to BH.

How did this man get to become the Central Bank Governor? From his statements, he is clearly a Boko Haram sympathizer and a very dangerous man to be in that position. I can't wait for him to finish his tenure and leave.

Becos them don dey tidy him brothers abi?

Mr CBN governor with Msc in Arabic Engineering.

War has a price tag, so is Peace. The Cost of War for Peace can always be justified, cos Peace is worth paying high cost for. There is NO substitute for peace.

Mr. Sanusi, of what value is stable economy in the atmosphere of terrorism, madness and mayhem ? A central bank Governor needs to NOT become Adviser on Economy Affairs.

This mallam is using the CBN position to expose his fanaticism. We are now wiser than Solomon, we can spot your cynicism miles away.
[size=15pt]
FRESH AIR! ALUTA CONTINUA!![/size]

question is; where does he get his details from? Looks like cookup to me! Ur tagging inflation rate at a single digit? When there is no substantial production commesurate.with consumption, importation outweighs exportation by a figure of 99.99%? There is unemployment as high as75% and u say inflation is on a single digit margin!

the_ripper3:
Mr CBN governor with Msc in Arabic Engineering.

He did not complain against amnesty, which would involve 'overspending' and now he is complaining that the army is deploying its somewhat idle resources to quash terrorism! Sometimes you are tempted to think that the northern elites have some hand in this whole BH thing!

Is BH the military wing of the political north?

SO YOU PEOPLE DON'T KNOW BY NOW THAT BANKERS RULE THE WORLD?

Give me control of a nation's money and I care not who makes the laws. Mayer Amschel Rothschild

Sanusi!On this one,I strongly disagree with you.You are known to be a Muslim Extremist with connections with the Boko Haram Sect,so this does not come as a surprise.Since the state of Emergency was declared we have had some peace in the nation,no news of bombings anywhere.For once GEJ is getting it right and let us support him rather than maligning his effort.

This malam has no idea of what cost economics is all about. He should first of all tell us the percentage of our budget that the SoE is taking and the would expenses to be incurred should the SoE lingers for a long period of time.

No amount will be too much to use to eliminate those Boko guys. If Govt goes broke on the fight I can support them financially.