20110107
reuters

LAGOS (Reuters) - The two main rivals in Nigeria's ruling party have locked horns over the country's dwindling oil savings and the state of its public finances, putting the economy back in the spotlight a week ahead of the primaries.

President Goodluck Jonathan's administration had spent the past few weeks defending itself against accusations that it has not done enough to guarantee national security, after bomb blasts in the capital Abuja and the central city of Jos.

But an 11-page letter from his main rival, former Vice President Atiku Abubakar, lambasting him for being too loose with the nation's purse strings when Nigeria should be reaping the benefits of rising oil prices, has refocused the debate.

"At a time of unprecedented oil boom, you have presented Nigeria with a budget of consumption for consumption, a budget of debt accumulation to imperil the future," Abubakar said in the letter, published on his Website this week. (www.atiku.org)

Jonathan presented a 4.2 trillion naira 2011 budget proposal to parliament in December, saying it represented a sharp drop in approved spending over 2010 and dubbing it a "budget of fiscal consolidation".

But almost 2.5 trillion naira was earmarked for recurrent expenditure -- the cost of running government -- while another 196 billion is for paying institutions such as the judiciary and 542 billion is for debt servicing. That leaves just over 1 trillion for badly needed capital spending.

"I almost wept for Nigeria after reading your 2011 budget," Abubakar said, pledging he would cut the cost of government and spend more on infrastructure, power, health and education.

Nigerian Finance Minister Olusegun Aganga, a quietly spoken former Goldman Sachs banker, was fielded by Jonathan to defend the budget against Atiku's broadside.