2012 budget is based on the following assumptions:' Oil production of 2.48 mbpd up from 2.3mbpd for 2011;' Benchmark oil price of US$70/barrel, a revision fromUS$75/barrel for the 2011 Amended Budget;' Exchange rate of NGN155/US$;' Projected GDP growth rate of 7.2%; and' Projected inflation rate of 9.5%.PRESIDENT Goodluck Jonathan yesterday presented a budget of N4.749 trillion for next year to a joint session of the National Assembly in Abuja, describing the expenditure profile as 'a stepping-stone to the transformation of our economy and country, in our walk to economic freedom.'The figure represents a six per cent increase over the N4.484 trillion appropriated for the current fiscal year.However, the recurrent expenditure, against public outcry, sustains its high profile in the budget, accounting for 72 per cent of the total spending plan, representing a marginal 2.4 per cent decrease from the 74.4 per share in this year's appropriation.Essentially, capital expenditure has an allocation of N1.32 trillion, representing a 15 per cent increase over the amount approved in this year's budget, with the president stressing that the focus would be 'on the completion of critical infrastructure projects.' The current expenditure would take N3.429 trillion.According to the President, the 2012 budget was based on crude oil price of $70 a barrel, against the benchmark of $75 a barrel adopted this year, at a projection production level of 2.48 million barrels per day, up from 2.3 million barrels per day for 2011 budget.The oil production and price assumptions have therefore put the gross federally collectible revenue at an estimated N9.406 trillion, of which the total revenue available for the budget has been put at N3.644 trillion, an increase of nine per cent over the current year's budget estimate.Deficit budget was therefore estimated at 2.77 per cent of GDP, against 2.96 per cent in 2011.The President told the legislators that the exchange rate had been projected at N155 to the dollar, while the Gross Domestic Product (GDP) is expected to grow at 7.2 per cent rate, with inflation estimated at 9.5 per cent.Specifically, allocations to some critical sectors include security, N921.91 billion; power (including bulk trader, Nelmco and multi-year tariff order), N161.42 billion; works, N180.8 billion; education (excluding Universal Basic Education Commission, Petroleum Technology Development Trust Fund and Education Trust Fund), N400.15 billion; and health, N282.77 billion.Others are agriculture and rural development, N78.98 billion; water resources, N39 billion; petroleum resources, N59.66 billion; aviation, N49.23 billion; transport, N54.83 billion; lands and housing, N26.49 billion; science and technology, N30.84 billion; Niger Delta, N59.72 billion; Federal Capital Territory Administration, N45.57 billion; and communications technology, N18.31 billion.Perhaps, wary of the unease that has been trailing the recurring high recurrent expenditure over the years, the president said his administration had strategised to reposition the spending profile.He said: 'Starting in 2012 for the medium term, we shall focus on the 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 analysing the financial and other factors including the economic rates of return, job creation, and environmental sustainability.'Similarly, government will continue to prioritise 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.'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.On macro-economic stability, he stressed that 'government is determined to pursue policies that will ensure a stable macro-economic environment through a strong and prudent fiscal policy, manageable deficits, sustainable debt-GDP ratio of no more than 30 per cent 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.'Our domestic debt profile has risen sharply in recent years, currently standing at about 16.4 per cent 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.'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 ongoing port reforms, government will work vigorously to increase our revenue from maritime and related activities.'Apparently not oblivious of the consequences of a generation of skilled, semi-skilled and able-bodied youths without gainful employment, Jonathan said government was poised to give more priority to inclusive growth and job creation.The president said critical sectors of the economy would be supported through policies to encourage investment so as to create jobs for Nigerians.He said: Against the background of the above reforms, this administration will promote jobs 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 Communication Technology, solid minerals development, manufacturing, aviation and creation of industries in order to further develop these sectors that are known to be sources of growth and job creation.Ahead of the presentation by Jonathan yesterday morning, tight security prevailed at the Three Arms Zone, Abuja, location of the National Assembly, as operatives of the State Security Service (SSS) condoned off and manned all entries and exits to the House of Representatives wing of the parliament.As early as 7.00 a.m., security operatives were deployed at the National Assembly Complex. There was vehicular and human traffic restrictions as thorough search was conducted before one was allowed entry through the main gate.The President arrived at the National Assembly Complex at about 12.10 p.m. with a large entourage of security operatives and went straight to meet with the legislators .Immediately after the National Anthem, Senate President, David Mark called on the Leader of the Senate, Victor Ndama-Egba (SAN), to give the opening prayers.The prayer was comprehensive and touched virtually every facet of the nation's yearnings and challenges including that of security. He prayed that the nation's greatest plague, Boko Haram, should dissipate. A loud Amen greeted his prayers in concurrence.In his opening address, Mark noted that despite eloquent speeches delivered yearly at budget presentations, the executive had not matched words with actions as economic policies lacked continuity and projects were carelessly abandoned.'It is our hope and sincerely belief that this budget will challenge us; and to take the challenge, we must tighten our belts. To do so, we must ensure that all sectors and every Nigerian irrespective of positions or status is involved.'Let me remind us that in 2011, the legislature led the way in reducing our overhead and recurrent expenditure, in order to increase investment in capital expenditure, and to lead by example,' he said.According to the Senate President, focus should be on critical infrastructure while revenue leakages must be reduced as a way to grow the economy, generate employment, encourage local production and promote made-in-Nigeria goods.While assuring of legislators' efforts towards full implementation, he envisioned a Nigeria with robust infrastructure.His words: 'Let this budget be the one that will say 'let there be light and there is light; let there be roads and there are roads; let there be water and there is water; let there be employment and there is employment; let there be medicare and it is so and let there be food and there is food.
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