Nigeria’s President Goodluck Jonathan today, delivered a determined speech with which he presented the 2012 Budget to a joint session of the National Assembly, a budget he calls “a stepping stone to the transformation of our economy and country”.
It was Jonathan’s second appearance at the National assembly for budget presentation – his first since he was sworn in as president in May this year.
He was set to address them in the green chambers of the House of Representatives. His speech was preceded by a short opening remark by Senate President David Mark, who started by criticising the poor implementation of the 2011 budget, but said he had hopes for the implementation of the 2012 budget which amounts to N4.8 trillion, reports say.
“Let this budget be the one that will say, let there be light and there will be light,” Senator David Mark said.
President Jonathan says he intends for this 2012 budget proposal to be transformative. He says it comes at the end of a “long consultative process with key stakeholders and it translates the developmental plans of government unveiled in the transformation agenda into concrete actions”.
The president said the year ahead would “neither be easy or uncontested” but insists that with sharp focus, hard work and determination, the nation will attain its set goals.
He said the budget is based on fiscal consolidation, inclusive growth and will focus on job creation and provision of food security for the nation.
“We are living witnesses to the extent of volatility that can afflict the international oil market with prices plummeting from US$147 per barrel in July 2008 to about US$38 per barrel four months later.
“Although the oil price is currently over US$100 per barrel, there is no guarantee what it would be in the future.
President Jonathan insisted, despite the rise in spending in 2011, that Nigeria can no longer afford to continue in the same way.
“So far the Nigerian economy has weathered the storms,” he said, but added that efforts need to be reinforced to ensure economic stability and sustained growth.
“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.”
Explaining the failed implementation of the budget for the 2011, which he described as a “peculiar fiscal year” for the nation, President Jonathan listed a number of factors that obstructed the nation.
“The 2011 Elections, the subsequent inauguration of a new Administration last May and the passage of the 2011 Amendment Budget in May 2011 all affected the implementation of the budget in 2011.”
While the budget this year is 7.7 percent higher than last year’s N4.48 trillion budget, Jonathan said the FG would cut back on recurrent expenditure – form 74.4 percent this year to an expected 72 percent next year – further promising that more funds would be geared toward capital projects.
Jonathan also addressed the matter of the nation’s fiscal deficit, which he said is expected to be about 2.77% of GDP in the 2012 Budget compared to 2.96% in 2011.
He told lawmakers the 2012 spending plan was based on a benchmark oil price of $70 a barrel and production of 2.48 million barrels per day. The output projection is higher than expected and leaves little room for potential production outages, which have been common in the past.
President Jonathan further gave a sectorial breakdown of the 2012 budget with N3.98 trillion earmarked for statutory transfer, N560 billion for debt services and N2.472 trillion for recurrent non-debt expenditure.
Allocations to some critical sectors of the economy are as follows:
- Security – N921.91 billion;
- Power [including Bulk Trader, Nelmco, and Multi-Year Tariff Order (MYTO)] -N161.42 billion;
- Works – N180.8 billion;
- Education [excluding Universal Basic Education Commission, Petroleum Technology Development Trust Fund (PTDF) & Education Trust Fund] – N400.15 billion;
- Health – N282.77 billion; and Agriculture & Rural Development – N78.98 billion.
- Water Resources – N39 billion;
- Petroleum Resources – N59.66 billion;
- Aviation – N49.23 billion;
- Transport – N54.83 billion;
- Lands & Housing – N26.49 billion;
- Science & Technology – N30.84 billion;
- Niger Delta – N59.72 billion;
- Federal Capital Territory Administration (FCTA) – N45.57 billion
- Communications Technology – N18.31 billion.
The budget proposal assumed an exchange rate of 155 naira to the U.S. dollar, average inflation of 9.5 percent and GDP growth of 7.2 percent. Inflation is currently running in double digits and the naira is trading at above 160 against the U.S. dollar.
President Jonathan in his conclusion called on National Assembly to work with his administration in turning the economic agenda for the nation into reality.
“The 2012 Budget, as our collaborative effort, has taken the welfare of Nigerians as top priority. In an environment of global uncertainties and domestic challenges, the strong support of the National Assembly is invaluable for us to achieve our set developmental goals.”
In closing, House speaker Honourable Aminu Tambuwal, commended the President’s budget presentation. He also commented on the lateness of the budget submission, but promised that the House would work hard to ensure the budget is implemented fully.