by Olalekan Adetayo
President Goodluck Jonathan on Friday signed the 2012 Appropriation Bill into law with a vow to sack all heads of parastatals, who he said security reports had indicted for lobbying the National Assembly for increased budgets.
The budget, with an aggregate expenditure of N4.697tn (excluding the appropriation of N180bn for programmes and projects encapsulated under the Subsidy Reinvestment and Empowerment Programme), is based on a benchmark oil price of $72 per barrel.
The appropriation consists of capital expenditure of N1.34tn and recurrent expenditure amounting to N3.357tn.
Describing the appropriation as a budget of fiscal consolidation, inclusive economic growth and job creation, Jonathan put the total revenue forecast at N3.561tn.
He said the additional $2 per barrel benchmark oil price (the difference between the proposed $70 and $72 approved by the National Assembly) was used to increase the capital and to reduce the deficit to a manageable level that the government could finance without excessive borrowing.
The President said the capital expenditure of N1.34tn, which is 28.5 per cent of the aggregate expenditure, was in line with his administration’s desire to complete and exit the large stock of ongoing projects and programmes.
Thus, he said the 2012 budget was focused on completing viable ongoing projects, in accordance with the transformation agenda, which would quickly deliver tangible and significant added value to Nigerians.
He said the government’s approach to funding the development of critical infrastructure was to involve the private sector, which had the capital and implementation capacity to successfully deliver specific infrastructure projects.
He put the none-debt recurrent expenditure at N2.425tn, which is 52 per cent of the total budget compared to 54 per cent of the aggregate budget in 2011.
He said this was in line with the government’s determination to correct the structural imbalance in its expenditure profile where recurrent spending had outstripped the growth of spending on capital projects in recent times.
He put statutory transfers at N372.59bn.
Jonathan explained that in line with the government’s medium-term strategy, the share of the recurrent spending in aggregate expenditure had declined from 74.4 per cent in 2011 to 71.5 per cent in 2012.
He said the deficit was 2.85 per cent of Gross Domestic Product, which was in line with the provisions of the Fiscal Responsibility Act, 2007, that pegged this at three per cent of GDP.
The President said because of the need to translate the robust growth experienced in recent years into tangible and concrete improvement in the living standards of Nigerians, the government was focused on investments in priority sectors in order to sustain economic growth and create jobs.
Jonathan said one of the things he had observed since his days as vice-president in 2007 till date was that the budgets had not been based on proper planning.
He accused some heads of Ministries, Departments and Agencies of lobbying the National Assembly to put figures that are not based on planning, saying that was why it had been very difficult for the Federal Government to achieve targets.
He said, “I will continue to plead with the National Assembly that if heads of parastatals come to you to lobby, drive them away.”
For the 2013 Budget, Jonathan said he had already directed the Chief of Staff to ensure that MDAs defended their proposals before him (the President) between May and June.
This, he explained, would allow the Ministry of Finance and the Budget Office to fine-tune the budget proposal between July and August so that he could present it to the National Assembly by September.
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