Nigeria’s President Goodluck Jonathan will Tuesday, 13 December, 2011, present the nation’s 2012 Appropriation Bill to a joint session of the National Assembly (the Senate and the House of Representatives), according to the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi OKonjo-Iweala.
Unveiling details of the budget Thursday, Dr. OKonjo-Iweala said the key targets of the proposals included assumptions of the Crude oil benchmark price of US$ 70 per barrel in 2012, ensuring that fiscal deficit is financeable and kept below 3% of GDP, reduction in recurrent expenditure from 74.4% of total expenditure to below 70% by 2015, increase in capital expenditure by 1.5% per year (at least 5% by 2015), steady domestic debt at 16.4% of GDP, reforming fertilizer, petroleum and other inefficient subsidies.
Others are the need to focus on completing existing stockpiles of ongoing projects and the need for state governments to introduce greater fiscal prudence and rationality in expenditure.
Speaking at the Centre for the Study of the Economies of Africa’s third Economic Policy and Fiscal Strategy Seminar in Abuja, Dr. Okonjo-Iweala stated that the budget would strengthen capital budget spending to 33% while reducing recurrent expenditure.
The budget, she stressed, would still give room for borrowing, on a lesser scale, with emphasis on domestic borrowing than foreign loans.
The new borrowing pattern, she said, would keep reducing on a yearly basis starting with the 2012 budget.
To achieve its target on recurrent expenditure, the 2012 budget would focus on a smaller number of Ministries, Departments and Agencies (MDAs) while many of the existing ones would be pruned or merged with others with similar responsibilities.
Priority, she said, would be given to investment in the following areas — security, infrastructure (power, roads, rail and aviation), agriculture, housing and construction – which she described as the next big push after agriculture – oil and gas, solid minerals, creative industries, education and skills, information and communication technology and the health sector.
Greater emphasis is to be placed on completing uncompleted projects before new ones are embarked upon, she said.
Dr. Okonjo-Iweala also stated “it won’t be business as usual for revenue generating agencies like the Nigeria Customs Service and the Federal Inland Revenue Service as they will longer be permitted to ‘recklessly’ spend more on their operations.
“Henceforth, they must remit at least 25% of the gross revenue they generate while their expenditures would be captured in the rest. This is a clear departure from the past when revenue generating agencies quote ridiculous amounts as money spent in generating revenue, leaving government with a trifling sum.”