The Security sector is to guzzle N922 billion next year, amounting to more than the combined allocations of 12 Federal ministries, according to a breakdown of the N4.7 trillion 2012 budget proposal presented by President Jonathan yesterday.The president presented the appropriations bill at a joint sitting of the National Assembly in Abuja, where he also said the downstream petroleum sector would be liberalised next year, effectively removing fuel subsidies.Based on the estimates, cost of running the government will rise to N2.47 trillion, representing 72 per cent of the total budget figures, up from N2.2 trillion in 2011. Capital expenditure is put at N1.32 trillion.Explaining the huge security votes, Jonathan said government plans to invest massively in security 'including providing more support for the police, defence and counter-terrorism operations. We recognise that we can only achieve the developmental goals in a secure and peaceful environment.'The security budget is distantly trailed by allocations for Education (N400 billion), Health (N283 billion), Works (N180 billion), Power (161 billion) and Agriculture (79 billion).It also amounts to more than the combined allocations for Health, Power, Agriculture, Water Resources (N39 billion), Petroleum (N59.7 billion), Aviation (N49 billion), Transport (N54 billion), Lands and Housing (N26 billion), Science and Technology (N30.8 billion), Niger Delta (N59 billion), FCT (N45.6 billion) and Communication Technology (N18 billion).Tagged budget of 'Fiscal Consolidation, Inclusive Growth and Job Creation', the estimates put total Federal Government expenditure at N4.749 trillion, representing 6 per cent over the N4.484 trillion appropriated for 2011.The budget breakdown provides N2.472 trillion as recurrent expenditure, N560 billion for debt service, N398 billion for statutory transfers while the balance of N1.32 trillion is for capital expenditure. While the percentage of recurrent expenditure for 2012 budget dropped from 74.4 per cent of total budget in 2011 to 72 per cent in 2012, the figure increased from N2.2 trillion to N2.4 trillion.The president said the recurrent spending would gradually decline over the next three years. 'I am happy to note that the declining share of capital is being reversed so it will account for about 28 per cent of total expenditure in 2012 compared to 26 per cent in 2011. We intend to continue on this path so that by 2015, it will have risen to almost 33 per cent,' he said.{pullquote}...cost of running the government will rise to N2.47 trillion, representing 72 per cent of the total budget figures, up from N2.2 trillion in 2011. {/pullquote}Regarding the removal of fuel subsidies, Jonathan said 'government will come up with policies to encourage investment in the downstream (petroleum) sector through liberalisation so as to create jobs for our people.' Daily Trust exclusively reported on Monday that the president's budget proposal would not contain any allocation for fuel subsidies in line with his plan to end the support regime starting by the end of this month.Revenue profile for the 2012 budget indicates that gross federally collectible revenue is put at N9.406 trillion out of which the Federal Government is to receive N3.644 trillion representing an increase of 9 per cent over the 2011 budget.The budget is based on oil production of 2.48 million barrels per day with oil price benchmark of US$70 per barrel, leaving little room for volatility. Exchange rate is fixed at N155 to US$1, projected Gross Domestic Product (GDP) growth rate is 7.2 per cent and projected inflation rate is 9.5 per cent. Budget deficit is 2.77 per cent of the GDP.Click here to read the budget speech by President JonathanOn performance of 2011 budget, the President said the budget reached 67 per cent funds utilisation as at November and is expected to increase to 70 per cent by the end of December 'which is fairly good considering the circumstances.'Jonathan also announced some economic strategies aimed at improving production and value addition to some cash crops in the country. He said government will increase duty rate on rice from 25 to 50 per cent to discourage importation saying 'effective December 31, 2012, all rice millers should move towards domestic production and milling of rice, as the levy of 50 per cent will be further raised to 100 per cent. Let me add here that no waivers or concessions will be entertained for rice and wheat importation.'On cassava, Jonathan said government will encourage the usage of cassava flour in bread-baking adding that 'bakeries will have 18 months in which to make the transition, and will enjoy a corporate tax incentive of 12 per cent rebate if they attain 40 per cent blending. With effect from March 31, 2012, importation of cassava flour will be prohibited so as to further support this programme. 'The President said the cardinal objective of his administration's economic policy is to promote industrialization and growth of the manufacturing and agricultural sectors of the economy that will generate employment for the people.
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