IN a nearly 5,000-word budget speech delivered in Abuja on Tuesday to a joint session of the National Assembly, President Goodluck E. Jonathan laid out what he wants the country to see as a passionate
agenda for a strong economic transformation of Nigeria.
This marks Jonathan’s first budget speech since his April election as president in his own right.
Security however appears to be paramount on the Jonathan Administration table of priorities, gulping nearly a trillion naira of the budget vote at precisely N921.91 billion, while Education received the second largest share at N400.15 billion. Others are Health at N287.77 billion and Works at N180.8 billion, while Power, Aviation and Transport were allocated N161.42 billion, N49.23 billion and N54.83 billion respectively.
Others are Agriculture and Rural Development at N78.98 billion, Water Resources at N39 billion, and Lands and Housing at N26.49 billion. The Science and Technology sector was also allocated N30.84, while Niger Delta affairs received N59.72 billion. Federal Capital Authority and the Communications Technology will receive N45.57 and N18 billion of budgetary allocation respectively.
According to the president, the aggregate expenditure proposed for the 2012 fiscal year is N4.749 trillion, which is a modest increase of 6% over the N4.484 trillion appropriated for 2011.
The president noted in his speech that the 2012 budget comes at a time of international economic instability, stressing that his administration has taken this into consideration along with keeping consultation with various stakeholders in the Nigerian economy.
“In the past year,” said President Jonathan, “the global economic recovery slowed down significantly and downside risks are on the increase as many countries, particularly in the Organization for Economic Cooperation and Development (OECD), (who) have faced serious challenges leading to fiscal retrenchment and austerity measures in the face of high and rising levels of sovereign debt.”
“The Euro Zone crisis in particular has time and again thrown financial markets into turmoil as several countries in this economic and monetary union continue to face difficulty in servicing their debts. On the other hand, although many emerging and developing countries, like India and China are experiencing relatively robust growth, downside risks remain as well. In fact, global growth projection has continuously been revised downward and is now 4% for 2012-2013.”
“These developments have implications for our economy as, aside from the impact on the inflow of Foreign Direct Investments, they could also lead to lower demand for our primary export commodity. We are living witnesses to the extent of volatility that can afflict the international oil market with prices plummeting from US$147/barrel in July 2008 to about US$38/barrel four months later. Thus, although the oil price is currently over US$100/barrel, there is no guarantee what it would be in the future.”
“We cannot subject the well-being of Nigerians to such large fluctuations and must therefore protect ourselves by managing our finances prudently including by adopting a conservative benchmark oil price for our budgets. “
“There are also uncertainties in the area of international food prices which make it imperative that we take steps to safeguard our position through policies that would promote food security. So far, the Nigerian economy has weathered these storms well but efforts need to be reinforced to ensure macroeconomic stability and sustained economic growth.”
The president cited economic growth of 7.85 percent in 2010 and 7.72 percent as of the second quarter of 2011 compared to 5.2% forecast for sub-Sahara Africa, as signs that the Nigerian economy remained resilient in the face of global economic uncertainty, promising to “to pursue a programme of greater fiscal discipline complemented with appropriate monetary policy in order to help stabilize our declining foreign reserve.”
Increased crop production, growth in wholesale and retail trade and increased financial sector activities backed by the banking sector reforms were identified by Jonathan as the main drivers of Nigeria’s current economic growth while, according to the president, “food inflation has been on a downward trend from 14.1% in October 2010 to 9.7% in October 2011.”
“Oil revenue receipts achieved the targeted levels as a result of relatively higher oil prices and production levels than benchmarked while non-oil receipts, though short of the projection for the period, are tending towards the set targets for 2011. As of mid-November, about 67% of the released funds had been utilized and we expect it to reach 70% by the end of December which is fairly good considering the circumstances. You will agree with me that 2010 and 2011 Budgets were relatively expansionary, and we must now inject a dose of caution.”
The 2012 budget, which is themed “fiscal consolidation, inclusive growth and job creation”, adopted four objectives in its implementation roadmap. The pillars include macroeconomic stability, structural reforms, focus on governance and institutions along with investment in priority sectors.
The Gross federally collectible revenue is projected at N9.406trillion, of which the total revenue available for the Federal Government’s Budget is forecast at N3.644 trillion, representing an increase of 9% over the estimate for 2011.