Jonathan S 2012 Budget Speech Before The National Assembly
Jonathan S 2012 Budget Speech Before The National Assembly
Jonathan S 2012 Budget Speech Before The National Assembly
Budget Speech
201 2
Delivered by: Before:
His Excellency Dr. Goodluck Ebele Jonathan, GCFR President Federal Republic of Nigeria
PROTOCOL
1. I
am
delighted
to
present
the
2012
Federal
Budget
Proposal
before
this
esteemed
Joint
Session
of
the
National
Assembly.
This
Proposal
comes
at
the
end
of
a
long
consultative
process
with
key
stakeholders
and
it
translates
the
development
plans
of
government
unveiled
in
the
Transformation
Agenda
into
concrete
actions.
2. This
budget
is
a
stepping-stone
to
the
transformation
of
our
economy
and
country
in
our
walk
to
economic
freedom.
This
esteemed
Assembly
would
agree
that
this
path
would
neither
be
easy
nor
uncontested;
but
with
a
sharp
focus,
hard
work,
determination
and
making
careful
choices
we
will
overcome.
GLOBAL
ECONOMIC
DEVELOPMENTS
3. In
the
past
year,
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),
have
faced
serious
challenges
leading
to
fiscal
retrenchment
and
austerity
measures
in
the
face
of
high
and
rising
levels
of
sovereign
debt.
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27
4.
5.
6.
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.
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7.
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.
DEVELOPMENTS
IN
THE
DOMESTIC
ENVIRONMENT
8. This
year
marked
another
milestone
in
our
democratic
experience,
with
the
successful
elections
and
peaceful
transition.
We
now
need
to
build
on
the
mandate
that
Nigerians
have
entrusted
to
us
to
deliver
the
dividends
of
democracy
through
stronger
economic
reforms
to
deliver
growth
and
create
jobs.
I
have
created
an
Economic
Management
Team
(EMT)
that
I
chair,
and
an
Economic
Management
Implementation
Team
(EMIT)
chaired
by
the
Coordinating
Minister
for
the
Economy
and
Minister
of
Finance,
to
help
us
deliver
on
this
economic
agenda.
9. The
robust
growth
recorded
in
the
first
half
of
2011
underscores
the
resilience
of
the
Nigerian
economy
and
the
prudence
of
our
economic
policies.
Our
growth
in
the
2010-2011
period
has
been
broad- based.
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10. The
economy
recorded
impressive
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.
Medium-term
prospects
are
also
bright,
with
real
GDP
growth
projected
to
remain
strong
over
the
period.
Furthermore,
we
intend
to
pursue
a
programme
of
greater
fiscal
discipline
complemented
with
appropriate
monetary
policy
in
order
to
help
stabilize
our
declining
foreign
reserve.
11. The
non-oil
sector
continues
to
be
the
main
driver
of
growth
with
increased
crop
production,
growth
in
wholesale
and
retail
trade
and
increased
financial
sector
activities
backed
by
the
banking
sector
reforms.
Contributions
by
the
oil
sector
continue
to
improve
as
average
daily
oil
production
rose
to
2.45
million
barrels
per
day
in
the
second
quarter
of
2011
compared
to
2.35
million
barrels
per
day
in
the
corresponding
period
in
2010.
12. At
the
same
time,
food
inflation
has
been
on
a
downward
trend
from
14.1%
in
October
2010
to
9.7%
in
October
2011,
but
it
is
still
a
matter
of
concern
as
our
objective
is
to
move
to
low
or
mid-single
digit
inflation.
REVIEW
OF
IMPLEMENTATION
OF
THE
2011
BUDGET
SO
FAR
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27
13. We
are
approaching
the
end
of
a
peculiar
fiscal
year
for
our
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.
Provisional
data
on
the
implementation
of
the
2011
Budget
as
at
October
2011
indicate
that
revenue
performance
improved
during
the
year
over
the
situation
in
2010.
14. 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.
15. With
the
support
of
the
National
Assembly,
the
Government
is
determined
to
pursue
a
programme
of
far-reaching
fiscal
consolidation
so
as
to
reduce
our
deficit
and
domestic
borrowing
to
more
manageable
levels.
16. We
have
introduced
measures
to
actualize
this
programme
in
the
2012
fiscal
year
both
in
the
areas
of
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PRIORITIES
OF
THE
2012
BUDGET
17. At
a
time
when
rating
agencies
are
downgrading
countries
globally,
the
Outlook
on
Nigeria
was
recently
upgraded
from
negative
to
stable
by
Fitch
Ratings;
this
was
largely
a
reflection
of
two
things:
a)
the
new
economic
programme,
including
the
Medium-Term
Fiscal
Framework
that
government
has
put
in
place
with
important
reforms
and
a
clear
programme
of
fiscal
consolidation;
b)
the
successful
political
transition
following
the
2011
elections.
18. In
furtherance
of
its
efforts,
the
government
has
significantly
scaled
up
the
flow
of
resources
to
key
areas
of
priority
including
Security,
Infrastructure
renewal
and
development
(including
power
and
roads),
human
capital
development
and
food
security
to
give
a
more
inclusive
growth
and
attention
to
job
creation.
Yet,
there
is
much
that
still
needs
to
be
done.
The
Transformation
Agenda
spells
out
the
strategic
direction
of
my
Administration.
19. In
this
respect,
being
the
first
budget
under
this
Agenda,
the
2012
Budget
has
been
designed
with
the
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7
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improved revenue collection, recurrent expenditure reduction and increasing the share of capital expenditure in aggregate spending, in contrast with the trend of recent years.
theme:
fiscal
consolidation,
inclusive
growth
and
job
creation.
20. To
achieve
the
above
objectives,
we
have
established
four
main
pillars,
namely,
(a)
Macroeconomic
stability;
(b)
Structural
reforms;
(c)
Governance
and
institutions;
and
(d)
Investing
in
priority
sectors.
Macroeconomic
Stability
21. Government
is
determined
to
pursue
policies
that
will
ensure
a
stable
macroeconomic
environment
through
a
strong
and
prudent
fiscal
policy,
manageable
deficits,
sustainable
debt-GDP
ratio
of
no
more
than
30%,
and
single
digit
inflation,
thereby
promoting
real
growth.
We
believe
that
these
measures
would
engender
a
stable
and
competitive
exchange
rate
and
help
to
reverse
the
declining
trend
of
our
international
reserves.
22. Our
domestic
debt
profile
has
risen
sharply
in
recent
years,
currently
standing
at
about
16.4%
of
GDP.
This
cannot
be
allowed
to
continue
and
become
a
new
burden
on
our
children.
So
in
addition
to
looking
at
the
expenditure
side
of
our
national
balance
sheet,
we
are
also
paying
strong
attention
to
the
revenue
side.
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23. In this regard, we have initiated steps to increase revenues by blocking leakages from various sources, improve corporate tax collection, and boost internally generated revenue. We also believe that we should be able to earn a lot more revenue from the maritime sector. As part of the on-going port reforms, government will work vigorously to increase our revenue from maritime and related activities. 24. Starting in 2012 for the medium term, we shall focus on cutting recurrent expenditure to sustainable levels through reducing waste, inefficiency, corruption and duplication in government. Recent reviews of public expenditures provide a basis for taking such measures. In order to make capital spending more effective, government is introducing a new template for analyzing the financial and other factors including the economic rates of return, job creation, and environmental sustainability. 25. Similarly, Government will continue to prioritize its expenditures while focus will be on the completion of viable on-going capital projects. It is our intention to fund and bring the large portfolio of on-going projects to completion in the next few years while also taking on flagship projects already identified in the Transformation Agenda.
Page 9 of 27
26. From
2012,
there
will
also
be
a
robust
programme
to
strengthen
our
oil
reserves
base,
and
increase
oil
exploration
activities
in
identified
inland
sedimentary
basins,
outside
the
Niger
Delta,
with
the
requisite
potential
for
the
production
of
oil
and
gas,
particularly
the
Chad
Basin.
Structural
Reforms
27. My
Administration
is
pressing
forward
with
key
structural
reforms.
We
are
implementing
the
privatization
of
the
power
sector
based
on
the
Power
Roadmap
which
I
unveiled
last
year.
We
believe
that
the
power
sector
can
benefit
from
liberalization
and
privatization
by
attracting
investors
in
the
same
manner
as
the
telecommunications
sector
has
done.
In
the
same
vein,
government
will
come
up
with
policies
to
encourage
investment
in
the
downstream
sector
through
liberalization
so
as
to
create
jobs
for
our
people.
28. We
have
also
embarked
on
reforming
our
ports
and
customs
and
we
intend
to
continue
vigorously
on
this
path
so
as
to
reduce
the
cost
of
doing
business
for
our
private
sector
actors.
No
longer
are
we
going
to
be
contented
for
clearance
of
goods
in
our
ports
to
take
3-4
weeks
with
attendant
demurrage
and
costs
while
it
takes
48
hours
elsewhere.
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29. In
this
regard,
I
have
set
up
a
Committee
chaired
by
the
Coordinating
Minister
for
the
Economy
and
Minister
of
Finance
with
a
mandate
to
remove
the
bottlenecks
at
our
ports
and
another
Committee
made
up
of
private
sector
users
of
the
ports
to
monitor
implementation.
We
also
intend
to
work
hard
to
improve
the
infrastructure
at
the
ports.
Other
impediments
such
as
those
arising
from
bureaucratic
and
costly
paperwork
will
also
be
removed.
30. With
regard
to
the
petroleum
sector,
the
Federal
Government
is
conscious
of
the
need
to
bring
the
Petroleum
Industry
Bill
debate
to
conclusion
so
as
to
give
investors
the
comfort
and
policy
certainty
that
they
require.
My
Administration
is
determined
to
bring
this
matter
to
closure
by
engaging
with
all
stakeholders
and
I
therefore
call
on
the
National
Assembly
to
work
with
us
in
this
regard.
Governance
and
Building
Institutions
31. Our
reforms
can
only
endure
if
they
are
founded
on
strong
systems
and
institutions
that
promote
transparency
and
we
are
taking
steps
to
strengthen
ours.
As
you
are
aware,
we
have
already
resumed
the
publication
of
revenues
allocated
to
the
three
tiers
of
Government
as
this
will
promote
transparency
and
accountability
in
the
management
of
public
funds.
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32. Similarly,
the
recent
passage
of
the
Freedom
of
Information
Act
has
further
strengthened
the
hands
of
citizens
in
monitoring
the
activities
of
government
and
I
acknowledge
the
role
of
the
National
Assembly
and
civil
society,
in
making
this
a
reality.
The
fight
against
corruption
is
a
collective
responsibility
and
my
Administration
will
strengthen
our
anti-corruption
agencies
such
as
the
EFCC
and
ICPC
to
enable
them
discharge
their
mandate.
Finally,
we
recognize
that
we
can
only
succeed
in
our
effort
to
transform
the
economy
if
we
have
a
vibrant
civil
service
and
we
fully
intend
to
embark
on
reforming
the
public
service
for
optimal
service
delivery.
Investing
in
priority
sectors:
Creating
Jobs
33. Against
the
background
of
the
above
reforms,
this
Administration
will
promote
job
creation
and
inclusive
growth
by
investing
in
critical
infrastructure,
human
capital
development
and
security
including
more
support
for
the
police,
defence
and
counter- terrorism
operations.
We
shall
also
give
priority
attention
to
Information
and
Communications
Technology,
Solid
Minerals
development,
Manufacturing,
Aviation
and
Creative
industries
in
order
to
further
develop
these
sectors
that
are
known
to
be
sources
of
growth
and
job
creation.
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34. Let
me
now
comment
on
a
few
sectors.
The
Agricultural
sector
is
being
totally
transformed
to
enable
us
move
from
traditional
farming
to
modern
agriculture
as
a
business
both
for
our
small
and
large- scale
farmers.
Our
objective
is
to
ensure
food
security
whilst
also
promoting
exports
in
agriculture
value
chains
where
we
have
a
comparative
advantage.
We
intend
to
process
and
add
value
to
different
crops
such
as
rice,
cassava,
sorghum,
oil
palm,
cocoa,
cotton
etc.
35. This
approach
is
central
to
our
transformation
strategy.
Accordingly,
this
Administration
has
adopted
enabling
measures
to
support
the
development
of
private
sector-driven
marketing
institutions,
and
push
for
policies
that
would
promote
our
agriculture
to
create
jobs.
36. To
unleash
the
potential
of
this
sector,
the
Federal
Ministry
of
Finance
has
put
in
place
a
mechanism
to
share
risks
with
the
banking
sector
by
guaranteeing
70%
of
the
principal
of
all
loans
made
for
supply
of
seeds
and
fertilizer
by
the
private
sector
this
season.
In
addition,
to
get
the
inputs
to
farmers
at
an
affordable
cost,
we
are
subsidizing
the
interest
rate
on
these
loans
to
bring
it
down
from
15%
to
7%
per
annum.
The
Minister
of
Agriculture
and
the
Central
Bank
are
collaborating
to
extend
these
services
for
credit
availability
for
the
medium
term.
Page
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27
37. We
are
introducing
further
fiscal
policy
measures
to
support
the
development
of
the
agricultural
sector.
In
this
respect,
the
duty
on
machinery
and
certain
specified
equipment
for
the
sector
will,
effective
January
31st
2012,
attract
zero
duty.
We
will
further
look
at
supportive
fiscal
policies
for
the
rice
and
wheat
sectors
to
stimulate
domestic
production.
38. Government
is
also
introducing
policies
to
encourage
the
substitution
of
high
quality
cassava
flour
for
wheat
flour
in
bread-baking.
Bakeries
will
have
18
months
in
which
to
make
the
transition,
and
will
enjoy
a
corporate
tax
incentive
of
12%
rebate
if
they
attain
40%
blending.
With
effect
from
March
31st
2012,
importation
of
cassava
flour
will
be
prohibited
so
as
to
further
support
this
programme.
39. All
equipment
for
processing
of
high
quality
cassava
flour
and
composite
flour
blending
will
enjoy
a
duty
free
regime
as
incentive
to
bakers
for
composite
flour
utilization.
Consultations
with
the
sector
to
ensure
a
smooth
transition
are
on-going.
40. It
is
common
wisdom
that
the
best
way
we
can
grow
our
economy
and
create
jobs
for
our
people
is
for
us
to
patronize
Nigerian-made
goods.
This
is
why
we
are
introducing
enabling
policies
to
drive
this
process.
In
this
regard,
we
are
introducing
fiscal
policy
measures
that
will
encourage
the
purchase
and
utilization
of
locally
produced
commodities.
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27
41. From July 1st 2012, wheat flour will attract a levy of 65% to bring the effective duty to 100%, while wheat grain will attract a 15% levy which will bring the effective duty to 20%. 42. Similarly, there will be a levy of 25% on brown rice to bring it to 30%. In addition, to encourage domestic rice production, a levy of 40% will be placed on imported polished rice leading to an effective duty rate of 50%. Effective December 31st 2012, all rice millers should move towards domestic production and milling of rice, as the levy of 50% will be further raised to 100%. Let me add here that no waivers or concessions will be entertained for rice and wheat importation. 43. We have also commenced implementation of the Power Roadmap which aims to create a robust power sector through the privatization of the generation and distribution of power as well as create an enabling environment for investment. Institutional arrangements have been made for a Bulk Trader company to intermediate between power producers and distributors in a market setting, thereby giving Independent Power Producers (IPPs) the confidence to invest in generation capacity.
Page 15 of 27
44. Government,
in
collaboration
with
our
development
partners
has
created
a
credit
risk
management
initiative
to
provide
Partial
Risk
Guarantees
(PRG)
to
give
comfort
to
gas
producers
in
respect
of
payment.
Similarly,
effective
January
31st
2012,
equipment
and
machinery
in
the
power
sector
will
attract
zero
duty.
45. The
Government
recognizes
the
provision
of
affordable
housing
as
a
social
need
and,
also,
a
veritable
source
of
socio-economic
development
and
job
creation.
Owning
ones
own
home
is
a
basic
aspiration
of
every
human
being,
and
our
people
are
no
different.
46. To
this
end,
based
on
a
new
housing
policy,
Government
is
working
with
our
development
partners
to
create
an
effective
mortgage
finance
system
in
the
country
and
to
develop
value
chains
in
the
building
materials
segment.
This
will
give
the
necessary
stimulant
to
the
sector
to
accelerate
its
development
and
also
help
to
reduce
the
cost
of
construction,
thereby
energizing
the
construction
industry.
47. It
is
a
well-known
fact
that
government
alone
cannot
solve
the
infrastructure
problem,
which
is
why
we
have
invited
the
private
sector
and
international
investors
to
partner
with
us
through
the
Public
Private
Partnership
(PPP)
arrangements.
Page
16
of
27
48. As
estimated
in
the
First
National
Implementation
Plan
of
the
Nigeria
Vision
20:2020,
we
need
N32
trillion
for
the
execution
of
capital
projects
over
a
four
year- period,
of
which
the
private
sector
is
to
contribute
N13
trillion.
In
this
respect,
we
are
creating
the
enabling
environment
to
attract
private
investments
by
having
a
clear
regulatory
framework.
49. Government
will,
in
addition
to
ongoing
critical
infrastructure
projects,
execute
new
flagship
projects
with
positive
multiplier
effects
across
the
country
through
PPP
arrangements
in
the
next
three
years.
50. In
our
continuing
effort
to
improve
on
our
human
development
index,
we
are
conscious
of
the
need
to
avoid
the
trap
of
focusing
on
economic
growth
as
an
end
in
itself,
but
rather,
a
means
to
improved
human
development
through
ensuring
better
health
care,
education
and
wealth
creation.
51. To
this
end,
my
Administration
will
continue
to
invest
in
these
sectors
to
improve
on
the
quality
of
education
for
our
children
especially
young
graduates
from
our
educational
institutions,
support
Public-Private
Partnership
arrangements
for
skills
development
and
improve
the
quality
of
our
health
service
delivery.
52. Fellow
Compatriots,
we
recognize
that
we
can
only
achieve
the
developmental
goals
in
a
secure
and
Page
17
of
27
THE 2012 BUDGET 53. The 2012 budget is based on a set of assumptions reflecting Governments determination to maintain prudence in the face of continued uncertainties in the external environment. Accordingly, the budget is based on the following: 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$75/barrel approved in the 2011 Amended Budget; Exchange rate of NGN155/US$; Projected GDP growth rate of 7.2%; and Projected inflation rate of 9.5%. 2012 Revenue and Expenditure Profile
peaceful environment. Accordingly, safeguarding the sovereignty, independence and territorial integrity of the country is at the heart of ongoing reforms in the security sector. As you are aware, we have since commenced strategic programmes to upgrade the skills of officers in the security agencies while modernizing security infrastructure across the country.
Page 18 of 27
54. Based
on
the
above
assumptions,
the
Gross
federally
collectible
revenue
is
projected
at
N9.406trillion,
of
which
the
total
revenue
available
for
the
Federal
Governments
Budget
is
forecast
at
N3.644
trillion,
representing
an
increase
of
9%
over
the
estimate
for
2011.
Non-oil
revenue
is
projected
to
grow
significantly
in
2012
as
recent
efforts
to
reform
revenue
collecting
agencies
and
the
implementation
of
initiatives
to
further
develop
non-oil
sectors
are
expected
to
yield
results.
55. 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.
I
am
pleased
to
note,
however,
that
the
declining
share
of
capital
is
being
reversed
so
it
will
account
for
about
28%
of
total
expenditure
in
2012
compared
to
26%
in
2011.
We
intend
to
continue
on
this
path
so
that
by
2015,
it
will
have
risen
to
almost
33%.
56. 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
72%,
down
from
74.4%
in
2011,
and
we
intend
to
continue
on
this
downward
trend
up
to
2015.
Page
19
of
27
57. The aggregate expenditure comprises N398 billion for Statutory Transfers, N560 billion for Debt Service underscoring the real need to address the rising domestic debt profile, and N2.472 trillion for Recurrent (Non-Debt) Expenditure. 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. 58. In this respect, I have received the preliminary Report of the task force which I set up for this purpose and we shall implement relevant recommendations. We are also pursuing the biometric verification of workers and pensioners as part of our effort to control cost. 59. Capital expenditure has an allocation of N1.32 trillion representing a 15% increase over the amount approved in the 2011 Budget. The emphasis is on the completion of critical infrastructure projects. 60. Based on the above, the fiscal deficit is projected at about 2.77% of GDP in the 2012 Budget compared to 2.96% in 2011. This is within the threshold stipulated in the Fiscal Responsibility Act, 2007 and clearly highlights our commitment to fiscal prudence as a way to create more space for the private sector.
Page 20 of 27
61. This
will
also
have
a
salutary
effect
on
our
domestic
debt
profile,
which
has
risen
significantly
in
recent
years.
We
are
determined
to
rein
in
domestic
borrowing,
and
through
this,
ensure
that
our
debt
is
at
a
sustainable
level.
62. As
I
mentioned
earlier,
government
has
made
significant
progress
in
putting
the
finances
of
the
nation
on
a
sound
footing
and
laying
the
foundation
for
rapid
and
sustainable
economic
growth.
63. 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.
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.
Page
21
of
27
Fiscal Policy 64. Fellow compatriots, you will agree that the budget is not an end in itself but rather, an instrument for the promotion of economic growth, wealth creation, poverty reduction and service delivery to the citizenry. Government desires that we should begin to experience a commensurate increase in gainful employment and social well-being of Nigerians with the rate of economic growth. 65. This 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 our 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. 66. I wish to reiterate here that the principal objective of my Administrations fiscal policy in the area of tariffs and trade is to promote industrialization and the growth of the manufacturing and agricultural sectors of the economy and above all to generate employment for Nigerians.
Page 22 of 27
67. As
part
of
the
process
to
realize
this
objective,
we
have
commenced
the
review
of
the
2008-2012
Customs
and
Excise
Tariffs
to
correct
identified
anomalies
and
introduce
policies
that
will
help
in
the
promotion
of
industrialization
in
the
country
when
the
review
is
concluded.
In
addition,
to
ensure
a
level-playing
field
for
businesses,
this
Administration,
beginning
from
the
2012
fiscal
year,
will
where
necessary,
only
grant
concessions
or
waivers
on
a
sectoral
basis.
The
focus
of
any
concessions
will
be
on
expanding
domestic
production
for
local
consumption
and
boosting
exports,
development
of
value
chains,
and
boosting
employment.
68. The
Export
Expansion
Grant
(EEG)
scheme
has,
over
the
years,
contributed
significantly
in
the
diversification
of
the
economy
through
the
promotion
of
non-oil
exports.
Efforts
have
therefore
reached
an
advanced
stage
to
review
and
streamline
the
Scheme
to
make
it
more
effective
as
an
instrument
for
the
promotion
of
non-oil
exports.
We
shall
also
aggressively
pursue
economic
diplomacy
within
the
framework
of
ECOWAS
to
ensure
that
the
ECOWAS
Trade
Liberalization
Scheme
(ETLS)
achieves
its
objective
of
promoting
intra-
ECOWAS
trade
and
that
it
is
not
used
as
a
vehicle
for
dumping
goods
in
the
region.
In
particular,
we
shall
review
the
application
of
the
ECOWAS
Trade
Liberalization
Scheme
(ETLS)
to
the
oil
palm
and
other
sectors.
Page
23
of
27
69. For
some
time
now,
especially
with
the
advent
of
the
consolidated
salary
structure,
there
has
been
agitation
over
the
lopsided
nature
of
the
Personal
Income
Tax
Act
and
the
fact
that
the
tax
free
allowances
were
inadequate.
I
am
pleased
to
announce
that
I
have
signed
the
Personal
Income
Tax
Amendment
Act
2011
into
law
which
amongst
others
has
the
benefit
of
reducing,
on
the
average,
taxes
paid
by
low
income
earners
and
providing
a
more
equitable
tax
structure
for
individuals.
This
law
also
provides
for
Tax
Appeal
Tribunals
to
listen
to,
and
address
concerns
of
individual
taxpayers
as
a
cost-effective
administrative
intervention
prior
to
recourse
to
the
courts.
70. Other
fiscal
changes
to
be
gazetted
shortly,
include
tax
waivers
on
all
bonds
and
related
instruments
issued
by
corporate
and
other
tiers
of
Government,
tax
rebates
as
incentive
to
companies
that
create
jobs,
regulations
to
support
taxpayers'
self-
assessment,
and
regulations
to
support
the
growing
quest
of
those
involved
in
social
and
community
development
to
get
tax
incentives
for
those
donating
to
their
causes.
71. As
you
may
recall,
Government
initiated
a
new
multifaceted
National
Job
Creation
Scheme
with
the
provision
of
seed
funding
of
N50
billion
in
the
2011
Budget.
Implementation
of
this
programme
has
commenced
in
earnest.
Page
24
of
27
72. This
Administration
believes
that
it
is
time
to
give
Nigerian
youths
an
opportunity
to
enjoy
the
dignity
of
a
job,
the
support
for
innovation,
the
confidence
to
be
an
entrepreneur
and,
the
sheer
optimism
to
be
an
employer
of
labour
along
with
the
security
of
an
income
that
can
contribute
to
our
economic
development.
We
are
conscious
of
the
fact
that
we
have
the
task
of
transforming
the
huge
potential
of
our
youths
into
real,
tangible
outcomes
which
all
of
our
people
can
experience
and
call
their
own.
73. In
this
respect,
Government
is
focused
on
stimulating
entrepreneurial
activity
and
setting
a
framework
for
young
people
with
creative
tendencies
to
showcase
their
business
acumen,
build
capacity
and
create
jobs.
In
this
spirit,
and
to
move
beyond
the
conventional
paradigm
of
job
creation,
the
Government,
partnering
with
the
organized
private
sector
and
our
development
partners,
took
bold
steps
to
initiate
the
Youth
Enterprise
With
Innovation
in
Nigeria
(YouWin)
programme
which
I
launched
in
Abuja
in
October
and
has
since
been
launched
also
across
the
six
geopolitical
zones.
74. This
programme
is
targeted
to,
not
only
create
a
new
generation
of
innovative
real
sector
entrepreneurs
in
Nigeria,
but,
in
the
medium
term,
also
generate
jobs
for
youths
across
the
country.
Page
25
of
27
75. I believe that this move will drive the future technological and socio-economic development of our country. YouWin will lead to the creation of about 100,000 jobs through support to our young entrepreneurs. CONCLUSION 76. Mr. Senate President, Mr. Speaker, Distinguished Senators, Honourable Members of this esteemed Assembly, the Proposal I lay before you this day seeks to sustain sound macroeconomic growth that will translate to achieving socio-economic transformation, and gainful employment for our people. But, we can only progress in this course and turn our possibilities into reality when we diligently adhere to the implementation of well thought-out and articulated developmental policies. 77. 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.
Page 26 of 27
78. As we collectively resolve to create a brighter and enduring future for all Nigerians - a future of hope and prosperity not lack, fear or hatred, we must prepare to overcome any adversity that may arise. Accordingly, we must all be determined and committed to follow through with the difficult but balanced choices that we make in piloting the affairs of this great nation. 79. Finally, I wish to appreciate the enduring partnership between the Executive and the Legislature in discharging our shared responsibility for nation- building and I note, with thanks, the patriotism, commitment and support that Distinguished and Honourable Members of this esteemed Assembly have consistently demonstrated. 80. Once again, I encourage us to dialogue openly, frankly and in good faith over the challenges that face us as a nation. It is my hope that the National Assembly will consider and pass the 2012 Budget Proposal expeditiously; and I foresee even more productive collaboration to the benefit of all our people. 81. I am indeed grateful for your kind attention. 82. May God bless you all, and bless the Federal Republic of Nigeria.
Page 27 of 27