2012 budget proposals inimical to transformation agenda, says LCCI

TO the Lagos Chamber of Commerce and Industry (LCCI), the 2012 budget proposal presented to the National Assembly was antithetical to the Federal Government's avowed transformation agenda. Rather, 'the numbers did not show a significant paradigm shift.'Specifically, LCCI, in its memorandum on the budget signed by its director-general, Muda Yusuf, said the lowering of recurrent expenditure by 2.4 per cent fell short of expectations and not significant enough.Besides, the chamber pointed out that the sectoral allocations tilted in favour of less essential areas, leaving the significant real and power sectors in the backwoods.Also, the nation's oldest formal business group faulted the overbearing emphasis of private sector in the development agenda, with government's contributions increasingly being minimised.The chamber, again, expressed worry over the proposed fiscal policy measures and also faulted the rising provision for debt servicing, 'against the backdrop of other national priorities.'According to LCCI, 'the expectation of a major restructuring of the budget turned out to be misplaced because it did not happen. The numbers did not show a significant paradigm shift. What was presented was only a marginal reduction in recurrent budget, which was reduced from 74.4 per cent to 72 pr cent of the total budget compared to 2011 budget, a mere 2.4 per cent reduction. This is not a significant reduction.'In an economy that is in dire need of infrastructure investment, committing 72 per cent of the budget to recurrent spending would not promote the cause of economic transformation. And going by record of budget implementation, performance of recurrent budget will be much more than that of capital. Therefore, the portion of the budget that would go to capital spending may even be less than the proposed 28 per cent.'The organised private sector operators said the government only exposed the fact that it has all along been paying lip service to power return agenda, given the paltry allocation to the sector.'The allocation of N161.4 billion to power sector, which is a paltry 3.4 per cent of the total expenditure, is inadequate. This allocation contrasts with that of security which is N921.9 billion or 19.4 per cent of the total expenditure. It is evident that the government is no longer inclined to invest in hard infrastructure in the power sector. This is a major shortcoming of the budget.'The appalling state of the power sector is the biggest challenge facing the economy today. It is true that the power sector reform has heightened expectations of increased private investment in the sector, this should not mean a complete abdication of responsibility in the provision of power supply to the citizens. There cannot be any transformation without a dramatic improvement in the power supply situation in the country.
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