SPEECH BY HIS EXCELLENCY, PRESIDENT GOODLUCK EBELE JONATHON, GCFR AT THE 2012 BUDGET SIGNING CEREMONY, ABUJA, FRIDAY, APRIL 13, 2012
It gives me great pleasure to welcome you all to the signing of the 2012 Appropriation Bill into law this morning.
I would like to begin by registering my gratitude to the Distinguished and Honourable Members of the National Assembly for the cooperation that has been put into preparing this budget which is undeniably a stepping stone in our medium-term developmental plan as presented in the Transformation Agenda.
I particularly wish to acknowledge the efforts of the Leadership of the Senate and the House of Representatives, the various Committees of the National Assembly, the Coordinating Minister for the Economy and the Budget Office for the painstaking work that has resulted in the budget that I am signing into law today.
You will recall that on December 13, 2011, I presented the 2012 Budget Proposal with a total expenditure of N4.749 trillion based on a benchmark oil price of US$70 per barrel to the National Assembly for appropriation. A total of N1.32 trillion was proposed for capital expenditure while N3.429 trillion was for recurrent expenditure. The initial 2012 Budget Proposal assumed full deregulation of the downstream petroleum sector. However, after listening to the voice of Nigerians, we opted for partial subsidy removal.
This meant that we had to review the Budget’s revenue and expenditure projections in order to make some provision amounting to N888 billion in the Budget.
On March 15, 2012, the National Assembly passed a budget of N4.697 trillion, based on a benchmark oil price of US$72 per barrel. This appropriation consisted of capital expenditure of N1.34 trillion and recurrent expenditure amounting to N3.357 trillion. We have had extensive discussions with the National Assembly since then, and the result is the Budget that I now have the honour of signing into law today. It is a Budget of fiscal consolidation, inclusive economic growth and job creation.
The Budget has an aggregate expenditure of N4.697 trillion (excluding the appropriation of N180 billion for programmes and projects encapsulated under the SURE-Progamme).
The total Federal Government revenue forecast is N3.561 trillion based on a Benchmark Oil Price of US$72 per barrel, which is US$2 higher than the initial proposal of US$70 per barrel. The additional resources were used to increase the capital and to reduce the deficit to a manageable level that we can finance without excessive borrowing. Details of the expenditure are summarised below:
•Capital Expenditure is N1.34 trillion, which is 28.5 percent of the aggregate expenditure. One of the main goals of this administration is to complete and exit the large stock of ongoing projects and programmes. Thus, the 2012 budget is focused on completing viable ongoing projects, in accordance with the Transformation Agenda, which will quickly deliver tangible and significant added value to Nigerians. Furthermore, our approach to funding the development of critical infrastructure in Nigeria is to involve the private sector, which has the capital and implementation capacity to successfully deliver specific infrastructure projects.
•Non-debt Recurrent Expenditure is at N2.425 trillion, which is 52 percent of the total budget compared to 54 percent of the aggregate budget in 2011. This is in line with Government’s determination to correct the structural imbalance in our expenditure profile where recurrent spending has outstripped the growth of spending on capital projects in recent times.
•Statutory Transfers is N372.59 billion.
•Based on the above and in line with Government’s medium-term strategy, the share of the recurrent spending in aggregate expenditure has declined from 74.4 percent in 2011 to 71.5 percent in 2012. The deficit is 2.85 percent of GDP, which is in line with the provisions of the Fiscal Responsibility Act, 2007, which pegs this at 3 percent of GDP.
The goal of achieving positive macroeconomic stability is no end in itself. The robust growth experienced in recent years needs to be translated into tangible and concrete improvement in the living standards of our people. In this respect, the Government is focused on investments in priority sectors in order to sustain economic growth and create jobs. The 2012 Budget is geared toward supporting economic growth and employment creation
Let me conclude by once more thanking the Legislature for their hard work and cooperation as, together, we continue to strive to ensure that we take the requisite steps to promote the welfare and well-being of all Nigerians.
God bless you all, and may God continue to bless the Federal Republic of Nigeria. Thank you.