By UDEME CLEMENT
President Goodluck Jonathan, after the disagreement with the National Assembly on the budget bench mark of $75 per barrel (bpd) of crude oil, presented a financial document of N4.92 trillion as aggregate expenditure for 2013 fiscal year. The document shows an increase of about 5 per cent over the N4.7 trillion appropriated for 2012, which is made up of N380.02 billion for Statutory Transfers, N591.76 billion for Debt Service, N2.41 trillion for Recurrent (Non-Debt) Expenditure and N1.54 trillion for Capital Expenditure.
The appropriation bill increased spending by 5 percent from this year’s N4.697 trillion but shrunk the deficit and cut the share taken by recurrent expenditure. The fiscal deficit declined to 2.17 percent of Gross Domestic Product (GDP) from 2.85 percent previously.
The budget assumes 2.53 million barrels per day bpd oil output, up slightly from 2.48 million bpd in 2012, and a global oil price of $75 a barrel, up from $72 a barrel this year. The budget focuses on critical economic and social sectors, even as some sectors are largely driven by private sector activities. The statistical analysis include Power sector allocation of N74.26 billion, N183.5 billion for Works, Education takes N426.53 billion, N279.23 billion appropriated for the health sector, N348.91 billion for Defence, Police has N319.65 billion, while Agriculture and Rural Development have N81.41 billion.
Fiscal deficit is projected to improve to about 2.17 per cent of GDP in the 2013 Budget compared to 2.85 per cent this year, which is within the threshold stipulated in the Fiscal Responsibility Act, 2007. On the Fiscal Policy, the President said in order to promote Nigerian agriculture and industry, additional supportive fiscal measures will come on stream with effec from January 1, 2013 to boost sugar production locally, discourage rice importation and improve air safety.
He said that machinery and spare parts imported for local sugar manufacturing industries will attract zero per cent duty, a 5-year tax holiday for sugarcane to sugar value chain investors; while import duty and levy on raw sugar will be 10 per cent and 50 per cent, refined sugar will attract 20 per cent duty and 60 per cent levy. Rice will attract 10 import duty and 100 per cent levy will be applied to both brown and polished rice, while all commercial aircraft and aircraft spare parts imported for use in Nigeria will now attract zero per cent duty and zero per cent VAT, in order to improve safety in the Aviation sector.
Experts speak on the budget:
The bench mark of $75 per barrel of crude is not the problem – Mr. Sulayman Bello,WAIFEM, Research Unit, Central Bank of Nigeria (CBN) Learning Centre, Satellite Town, Lagos: The issue in the budget is not about the bench mark but proper implementation. Looking at the economy presently, government needs to invest more in capital expenditures to stimulate economic growth and development. Government should focus more on improving Housing, Small and Medium Enterprises (SMEs) sub-sectors as well as agriculture to enhance creation of jobs inline with its transformation agenda. These sectors if well funded have the potentials to create massive jobs for the youths across the country. Government should embark on housing projects in strategic places like Lagos , Sokoto, Abuja , Kaduna and other areas. The Federal Housing Authority must be empowered to function effectively. Infrastructure development like power, roads and railway projects need special attention.
Allocation for agriculture needs adequate utilisation – Registrar, Nigerian Institute of Animal Science (NIAS) Abuja, Dr. Godwin Oyedele Oyediji, and a former chairman, Agriculture, Non-oil Export Trade Group, Lagos Chambers of Commerce, Industry, Mines and Agriculture (LACCIMA): The major issue we are looking at is adequate implementation of the amount allocation for agriculture to enhance creation of jobs for the citizens, especially the youths. Youth empowerment in agriculture most be given serious concern to enhance productivity in the sector in terms of revenue generation and food security for the nation considering the current population. Another important aspect of agriculture government should implement adequately in the budget is enhancement scheme for farmers. For instance, most youths trained to become professional in agriculture had migrated to urban centres, especially in the Southern states. Similar migration is affecting the Northern region now.
Government is trying but a lot needs to be done to fast track growth in the sector. For example, there is provision of N5million loan for animal scientists now. The loan is made possible through the effort of Nigerian Institute of Animal Science (NIAS) for people involved in direct production. The loan is disbursed by National Economic Reconstruction Fund, which is an agency charged with the responsibility of giving the facility to graduate of animal science, at 8 per cent interest without clitoral. The stringent condition of collateral has removed through the initiative of NIAS, in order to ensure easy accessibility to the loan.
The sector needs export support, market penetration and technology to add value to the outputs. The government should also address the issue of Value-Chain pragmatically in various agricultural produce like cassava, which could be used for ethanol, glucose and starch to generate more income for farmers. For instance, the skin of domestic animal like goat is useful for shoe making with high industrial value. Eating the meat with the skin is just like consuming an industry, because the skin has low protein content. Other things government must implement are processing and efficient packaging of agricultural produce to meet international standard. Subsequently, government should strive to meet the 25 per cent bench mark for the sector, because it has the capacity to create more jobs. The 25 per cent is the specified bench mark already on ground.
The major problem with our budget is poor implementation—Mr. Charles Akinsete, a financial analyst and the First Vice Chairman, Nigerian Association of Industrial Pharmacists (NAIP):
The issue with national budget in the country has gone beyond the figures and monetary allocations for various sectors of the economy. We are concerned about appropriate implementation of the budget to achieve the desired result. For example, the amount allocated for the health sector should be used to improve the health care system in the country, such that ordinary citizens can have access to good health care services when need be. For instance, government has a responsibility to tell us how much of the appropriation bill of 2012 was implemented. Simple allocating figures on paper without implementation would not have the economy in any way.