President Goodluck Jonathan presented a N4.93 trillion budget to the national assembly for 2013 on Wednesday.

In the budget, the president increased spending but reduced the deficit to 2.17 percent from the 2.85 percent deficit recorded in the 2012. It also reduced the share taken by recurrent expenditure.

The Ministry of Education will receive the largest chunk of the 2013 Budget. At N426.5 billion, Education beats Defence (N348.9 billion) and Police Affairs (N319 billion) into second and third place.

Other highlights are Power (N74.2 billion), Health (N279 billion) and Agriculture (N81 billion).

The budget proposal assumes oil production of 2.53 million barrels per day (bpd), up slightly from 2.48 million bpd this year, and a global oil price of $75 a barrel, up from $72 a barrel in this year's budget.

The fiscal deficit and domestic borrowing would come down to 2.17 percent of GDP, from 2.85 percent previously, assuming the economy grows at 6.5 percent, he said - lower projection than this year's expected 6.85 percent growth.

He added that the government would issue a $1 billion Eurobond to finance a gas pipeline for domestic use.

Meanwhile, Senate speaker Aminu Tambuwal said on Wednesday the house had proposed to inflate cabinet's oil price assumption in the 2013 budget to $80 barrel, from $75 a barrel proposed, signalling a likely showdown over the bill.

Money earned from oil over the benchmark price is deposited into a savings account, so any increase in that price could reduce savings and make Nigeria less resistant to oil price shocks. Nigeria's Finance Minister Ngozi Okonjo-Iweala is on an austerity drive and wants the country to save more.

source:businessdayonline.com