Nigerian President Goodluck Jonathan signed an amended 4.485 trillion naira 2011 budget on Friday, a plan which will keep sub-Saharan Africa's second biggest economy just within a 3 percent deficit target.
Finance Minister Olusegun Aganga said the budget assumed total revenues of 3.348 trillion naira based on a benchmark oil price of $75 a barrel, meaning the budget deficit would stand at 2.96 percent.
Jonathan also signed a bill to create a sovereign wealth fund, paving the way for Africa's biggest oil exporter to improve the management of its often-squandered windfall crude oil earnings.
"I have just signed the 2011 appropriation bill and the sovereign wealth investment fund into law," he told reporters in the presidential villa in the capital Abuja.
Jonathan originally proposed a 4.226 trillion naira budget in December but lawmakers inflated the plans three months later to 4.972 trillion naira, a proposal the president rejected.
Parliament later pruned the spending plans after negotiations with the government and on Wednesday passed the revised version which Jonathan signed.
The government has said the 2011 budget is supposed to mark a period of fiscal consolidation in sub-Saharan Africa's second biggest economy. Aganga had described the lawmakers' first inflated version as "unimplementable".
Central Bank Governor Lamido Sanusi has also repeatedly warned of the damage loose fiscal policy could do to the economy in Africa's biggest crude oil exporter.
On Tuesday, the central bank unexpectedly raised its key interest rate to 8 percent and doubled lenders' cash reserve requirements in an effort to curb inflation and ease pressure on the local naira currency.
The proposals for high public spending were highlighted as a major factor in the decision to tighten monetary policy again.
Nigeria set a 3 percent deficit threshold in a fiscal responsibility act in 2007 but has struggled to achieve that target in recent years.
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