WHEN President Goodluck Jonathan presented to the National Assembly the proposed 2012 appropriation, he noted that the Federal Government is conscious of the need to control the cost of governance and will, therefore, streamline agencies with overlapping mandates as a way to realign public expenditure.The senate opened discussion on the general principles of the proposal before committing it to its Committee on Appropriation. From the tone of last week's discussion, the legislators appear to be apprehensive about the Appropriation Bill. Hitherto, there were complaints of a quantum of fund being allocated to recurrent expenditure and the Legislature resolved that appropriate steps should be taken to check the trend. And towards that objective, the lawmakers pruned the overhead expenditure of the National Assembly and challenged the Executive to follow suit.The proposal of a N2.4 trillion for recurrence compelled the Senate to revisit the issue of over bloated budget. Some lawmakers pilloried the Executive for its insensitivity to the plight of Nigerians.Senator Ganiyu Solomon (ACN, Lagos West) said, 'I am worried about the capital component of the budget. We had expected to see a budget that will promote growth but I am afraid that the 28 per cent allocation to capital may not bring about stimulation in this direction.'Most lawmakers had expected a clear statement by the Executive on the removal of oil subsidy. Those privy to the thinking of some lawmakers on the issue, thought it would be a repeat of the drama by Bashir Nadabo from Katsina State in the House of Representatives in 2006 when former president, Olusegun Obasanjo presented the budget. Nadabo, before the event, told everyone that the Legislature would no longer tolerate Obasanjo's penchant for breaching the appropriation law. As Obasanjo ended his budget speech, Nadabo exclaimed: 'Mr. President, we are tired of you and your budgets because you have never implemented any.'A shocked Obasanjo asked, 'Who is this'' Then Speaker of the House, Aminu Bello Masari intervened with a hurried vote of thanks. After the event, Nadabo said his aim was to tell Obasanjo to his face that the Legislature was not happy with the situation where the non-implementation of the budget had become a hallmark of his administration.Against this backdrop, Deputy Senate Leader, Senator Abdul Ningi said that the problem with the budget since 1999 has been weak oversight functions. Ningi, who was House Leader between 2003 and 2007, recalled that since he came to the National Assembly in 1999, he has not seen standing committees present reports on oversight functions, which would form the basis of tasking some agencies over poor implementation of budgets.Besides poor implementation of budgets, the N921.91 billion earmarked for security allocation attracted criticisms from lawmakers. Most lawmakers hinted that there was more that they didn't know about the allocation.According to Ningi, 'our problem has been ineffective oversight function. We lack the will on the implementation of the budgets and oversight. We need to know the details of the huge allocation to security. We should address the cause of insecurity instead of addressing security. That is why we should give attention to agriculture, which can employ millions of people.'Senator Olubunmi Adetunbi (ACN, Ekiti North) pointed out that the vote for security is four times higher than the allocation for health while Ministry of Works, will need six years to spend such amount of money.An outline of the allocations to each sector are, 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 (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.The president, in the Medium Term Expenditure Framework spoke on withdrawal of oil subsidy and provision of social safety net, but the 2012 appropriation was silent on this. Also missing from the budget is a framework within which states and the Federal Government would partner to address pervasive poverty.To allay fears that government might not have the funds to finance the budget, Jonathan talked of plans to shore up revenue and 'as part of the process to realise 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 industrialisation in the country when the review is concluded. This Administration, from 2012, 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.'We have initiated steps to increase revenues by blocking leakages, improve corporate tax collection, and boost internally generated revenue. We also believe that we should be able to earn more revenue from the maritime sector. Government will work to increase revenue from maritime and related activities.'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 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.'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. I therefore call on the National Assembly to work with us in this regard.'His plans on job creation were faulted because there is no clear road map on the matter. He had said that, '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.'On agriculture, he said that '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 31, 2012, attract zero duty. We will further look at supportive fiscal policies for the rice and wheat sectors to stimulate domestic production,' he disclosed.The president announced some fiscal measures designed to lapses in the economy. He said, '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 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. 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 utilisation. Consultations with the sector to ensure a smooth transition are on going.'It is common wisdom that the best way we can grow our economy and create jobs for our people is for us to patronise 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 utilisation of locally produced commodities.'From July 1, 2012, wheat flour will attract a levy of 65 per cent to bring the effective duty to 100 per cent, while wheat grain will attract a 15 per cent levy, which will bring the effective duty to 20 per cent.'Similarly, there will be a levy of 25 per cent on brown rice to bring it to 30 per cent. In addition, to encourage domestic rice production, a levy of 40 per cent will be placed on imported polished rice leading to an effective duty rate of 50 per cent. 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. No waivers or concessions will be entertained for rice and wheat importation.'As the debate continues in the National Assembly on the budget, the concern of most Nigerians is what the final position is on the issue of oil subsidy. It was gathered that the Presidency removed the issue from public domain so as to surreptitiously smuggle it in when the coast becomes clear, especially from the Legislature because of the ferocious campaign against it.
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