2010-03-31
ABUJA (Reuters) - A budget deficit of 5-6 percent is not necessarily a bad thing for Nigeria, but the government must focus on the quality of spending, a Goldman Sachs banker tipped to take over as finance minister said on Wednesday.

Nigeria's Senate on Wednesday confirmed Olusegun Aganga as one of 38 nominees for Acting President Goodluck Jonathan's cabinet.

"I know there has been an increase of about 50 percent in the budget and we are running a budget deficit of between 5-6 percent of GDP," Aganga told the Senate during his screening. "That in itself is not necessarily a bad thing."

"What is more significant is that money is allocated to projects that will deliver strong social and economic returns which means that the emphasis is going to be now on implementation, making sure that the quality and efficiencies of spending are looked at strictly," he said.

Jonathan two weeks ago sacked the cabinet in a bid to assert his authority a month after assuming executive powers in the absence of ailing President Umaru Yar'Adua, who remains too sick to govern.

Aganga is currently a London-based executive at U.S. investment bank Goldman Sachs.

Nigeria's parliament last week approved plans to lift spending by half this year as the country tries to spend its way out of a downturn, an expansionary budget which risks pushing it to a deficit of more than 5 percent.

Both houses of parliament approved total spending of 4.608 trillion naira for 2010, sending the legislation to Jonathan to be signed into law.

Analysts welcomed the government's move to boost the economy but cautioned that the quality of spending would be key, given Nigeria's reputation for inefficient budget implementation.