Jonathan silent on fuel subsidy removal as he unveils N4.749t 2012 Budget

*Capital - N1.32 trillion, Recurrent (Non-Debt)          Expenditure -   N2.472 trillion
*Restricts importation of Rice

President Goodluck Ebele Jonathan yesterday presented before a joint session of the National Assembly a N4.749trillion proposed budget for the 2012 fiscal year.He also announced the restriction on importation of rice with the imposition of 30 percent levy on brown rice and 40 percent levy on imported polished rice leading to an effective duty rate of 50 percent.
The budget he explained was predicated on the following projections: Oil production of 2.48 million barrels per day (mbpd) up from 2.3mbpd for 2011; Benchmark oil price of US$70/barrel, a cautious revision from the US$75/barrel approved in the 2011 Amended Budget at exchange rate of N155/US$; Projected GDP growth rate of 7.2%; and Projected inflation rate of 9.5%.
Giving the breakdown of the 2012 Revenue and Expenditure Profile, President Jonathan said; "based on the above assumptions, 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."
He noted that non-oil revenue is projected to grow significantly in 2012 based on recent efforts to shore up the revenue drive of the federal government.
The President put the aggregate expenditure proposed for the 2012 fiscal year as N4.749 trillion, which shows an increase of 6 percent over the N4.484 trillion appropriated for 2011.The aggregate expenditure comprises N398 billion for Statutory Transfers, N560 billion for Debt Service and N2.472 trillion for Recurrent (Non-Debt) Expenditure.
Capital expenditure has an allocation of N1.32 trillion representing a 15 percent increase over the amount approved in the 2011 Budget. President said the emphasis is on the completion of critical infrastructure projects.
He explained that the declining share of capital is being reversed; "so it will account for about 28 percent of total expenditure in 2012 compared to 26 percent in 2011. We intend to continue on this path so that by 2015, it will have risen to almost 33percent."This underscores the need to intensify our efforts to curtail recurrent expenditure, which we have already embarked upon under the policy of fiscal consolidation as evident from the Medium-Term Fiscal Framework. The share of recurrent expenditure in the 2012 Budget proposal is 72percent, down from 74.4percent in 2011, and we intend to continue on this downward trend up to 2015", he said.
The budget is also based on the fiscal deficit that is projected at about 2.77 percent of GDP in the 2012 Budget compared to 2.96 percent in 2011. This according to President Jonathan is within the threshold stipulated in the Fiscal Responsibility Act, 2007 and clearly highlights the government’s commitment to fiscal prudence as a way to create more space for the private sector.
Sectoral Allocation

Allocations to some critical sectors 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. Others are: 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 and Communications Technology - N18.31 billion.
President Jonathan however, said the Budget seeks to act, not only to create jobs, but to also lay a solid foundation for sustainable economic growth which would deliver the dividends of democracy to the people. "In this respect as you may recall, I hosted a retreat in October this year with the organized private Sector (OPS) at which a number of issues including fiscal policy were extensively discussed. We are conscious of the need to control the cost of governance. Government will streamline agencies with overlapping mandates as a way to realign public expenditure," President Jonathan added.
In his reaction to the budget, the Speaker of the House of Representatives, Aminu Waziri Tambuwal assured President Goodluck Jonathan that the legislature would accord the budget accelerated consideration in the interest of the people of Nigeria.
He warned that the legislature would not accept selective implementation of the budget by the executive as it has been the practice in the past saying Nigerians would assess the government based on its deeds rather than promises.
The Speaker who said this while moving the vote of thanks at the presentation of the 2012 Appropriation bill by President Goodluck Jonathan to the joint session of National Assembly also lamented that the budget presentation was coming rather late.
He said, "Let me emphasize that selective budget implementation has no place in our constitution and the legislature shall not abdicate its responsibility in ensuring full budget implementation through the instrumentality of oversight."
According to Tambuwal, the high number of uncompleted projects across the country was an attestation to successive failure of the executive to implement budgets in the past years saying "it is the single most obvious sign of shoddy government implementation of the national budget over the years."
He told the President that Nigerians are resilient people and can weather the storms of hardship starring them in the face but cautioned that "it is important to remind ourselves that, with the benefit of hindsight, Nigerians will believe our deeds and not our words."
He assured that the legislature would accord the budget accelerated consideration saying, " On our part, we wish to assure Nigerians that we shall do our best to ensure that we complete work on the budget within reasonable time so that implementation can start early. We hope that this time around, we shall break the jinx of low budget implementation. The truth is, there is no better signal that a government is alive to its responsibility than through its strict adherence to its own budget proposal."
Tambuwal, who received a standing ovation while his speech was intermittently stopped by applauses from his colleagues also told Jonathan that "we are moved with a feeling of a new spirit to remove the annual budget presentation from the realm of sheer rhetoric to one of a comprehensive presentation of a workable document. I must, however, note that the budget proposal is again coming rather late in the day."