UPDATE 1-Nigeria president delivers disputed 2013 budget

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ABUJA, Oct 10 (Reuters) - Nigeria's President GoodluckJonathan on Wednesday presented a 4.93 trillion naira ($31.35billion) budget to parliament for 2013, increasing spending butshrinking the deficit and cutting the share taken by recurrentexpenditure.

In a sign there was likely to be a showdown between cabinetand parliament the cabinet over the bill, speaker Aminu Tambuwalsaid the house had proposed to inflate cabinet's oil priceassumption in the 2013 budget to $80 barrel, from $75 a barrel,triggering cheers from fellow legislators.

Jonathan's budget proposal saw the fiscal deficit comingdown to 2.17 percent of GDP, from 2.85 percent previously,assuming the economy grows at 6.5 percent, he said -- a lowerprojection than this year's expected 6.85 percent growth.

It assumed oil production of 2.53 million barrels per day(bpd), up slightly from 2.48 million bpd this year, and a globaloil price of $75 a barrel, up from $72 a barrel in this year's.

Money earned from oil over the benchmark price is depositedinto a savings account, so any increase in that price couldreduce savings and make Nigeria less resistant to oil priceshocks. Nigeria's Finance Minister Ngozi Okonjo-Iweala is on anausterity drive and wants the country to save more.

But lawmakers, who have been grumbling about delays in theirallowances in the execution of the 2012 budget, were in no moodto accept such a slight increase in the benchmark.

Such disagreements have happened before, and parliament hasusually succeeded in boosting total spending.

In his speech, Jonathan urged parliament to accept a tighterbudget because of ongoing uncertainty over oil prices. Oil makesup around 80 percent of Nigeria's revenues.

"This threat of oil price volatility remains constant andforces us to rely on a prudent methodology when calculating thebenchmark price," he said.

"These are uncertain times in the world economy. We've takennecessary steps to mitigate possible negative effects ... of aglobal recession."

He proposed cutting recurrent expenditure -- the cost ofrunning the government -- to 68.7 percent of the total budget,from its current 71.47 percent. Economists have urged Nigeria toslash what they say are extortionate state running costs.

Jonathan added that the government would issue a $1 billionEurobond next year to finance a gas pipeline for domestic use.

(Reporting by Camillus Eboh; Writing by Tim Cocks)

((tim.cocks@thomsonreuters.com)(+234 803 400 4248))


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