Thursday, July 7, 2011

Okonjo-Iweala pledges tighter Nigeria fiscal policy

6 July 2011

* Pledges tighter fiscal policy, job creation

* Sees no immediate revaluation of naira currency

* Worried by fall in foreign reserves

ABUJA, July 6 (Reuters) - World Bank managing director Ngozi Okonjo-Iweala laid out her vision for the Nigerian economy on Wednesday, pledging she would create jobs and ensure the country "lives within its means" if approved as a cabinet minister.

President Goodluck Jonathan has asked Okonjo-Iweala, a respected former finance minister who helped negotiate debt relief in 2005, to return to her old position with broad powers over economic management, government sources have said.

She appeared before the Senate on Wednesday to be grilled by lawmakers over what she would do as a minister, part of the process of approving Jonathan's cabinet nominees.

"I am really worried about the issue of making sure our budget is not eaten up by recurrent expenditure. How can we invest in capital if we're spending all our money on recurrent expenditures," Okonjo-Iweala told the hearing.

"Can we run a budget that is not negative? Absolutely. We can do it, we have done it. We have been able in the past."

The high cost of government has been a major concern for economists and investors in sub-Saharan Africa's second-biggest economy. Recurrent expenditure accounts for well over half of government spending despite poor public services.

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