This is the earliest budget presentation by a president since 1999.
President Goodluck Jonathan’s spending proposal for 2013, presented to the National Assembly on Wednesday, is recommending modest raises across key sectors, and has proposed a relatively lean N8 billion increase for sharing between the National Assembly, Courts and other statutory bodies.
The Independent National Electoral Commission, the Niger Delta Development Commission, the Universal Basic Education and the Human Rights Commission will also benefit from that raise.
The six statutory bodies, whose budgets are not open to legislative review, will share N380.02 billion next year against N372.6 billion for 2012.
Details of the distribution are not clear yet as the budgets have only been submitted and have not been considered by the lawmakers.
But since becoming part of the elite statutory groups in 2010, insulated from the executive financial supervision, the National Assembly has taken the lead in the group’s allocations.
For 2011, while the NASS drew N150 billion, the second highest earner was the National Judicial Council, representing federal courts, with N75 billion. The least was the National Human Rights Commission with N802 million.
A raise may possibly follow same trend. The increase is also subject to an upward review by the lawmakers as have been routine in past years.
Early budget presentation
Overall, the president’s N4.92 trillion proposal represents a five percent raise over the current year, 2012. Under the outlay, recurrent expenditure will cost N2.41 trillion while N1.54 trillion will be spent on developmental or capital projects.
The presentation made on October 10, was the earliest ever for National budgets since 1999. The president said the new timeline underlines his administration commitment to a “new Nigeria.”
When approved, the implementation of the budget will commence January 1, 2013 against past practices where implementations spilled into successive years, he said.
Such extensions affected the execution of the 2012 budget, he added.
The president credited his administration with a robust economic performance, with growth at the end of second quarter reaching 6.28 percent against forecast of 5.4 percent.
Inflation also dropped from 12.9% in June 2012 to 11.7% in August 2012, while the nation’s foreign reserves now stand at US$41.6 billion, the highest it has been in over 2 years, Mr. Jonathan said.
The $75 benchmark
The 2013 plan, expected to be approved by the National Assembly by year end, is based on oil production of 2.53 million barrels per day, up from 2.48 million barrels per day for 2012.
Benchmark oil price is pegged at US$75/barrel, an increase from the US$72/barrel approved in the 2012 Budget.
But while parts of the president’s proposal were applauded by the lawmakers at the session, such as the further reduction of the recurrent expenditure and relative increase on the capital, his suggestion of $75 oil price benchmark immediately stirred disagreement for the usually testy relationship with federal lawmakers.
The House of Representative Speaker, Aminu Tambuwal, warned that the House will go for a higher value of $80 per barrel of oil.
Mr. Tambuwal said the House preferred that the difference of 5 US Dollars per barrel to be channelled exclusively towards reducing the deficit in the budget and domestic borrowing.
“This will make available these loanable funds to our private sector which will stimulate the economy and jobs creation for our teeming unemployed youths,” he said.
Solving budget implementation problems
Past budgets have been dogged by implementation controversies and whether the National Assembly has the powers to make inputs during appropriation.
Senate president, David Mark, said it remained clear the lawmakers reserved such powers and warned that the National Assembly will deploy more of its oversight powers for the 2013 budget “never like before.”
“We do not think the constitution intended to turn the National Assembly into a mere mechanical rubber stamp that rolls robotically past budget estimates,” Mr. Mark said.
Mr. Jonathan announced a number of measures to help turnaround key sectors and avoid falling with an unstable global economy.
With gross federally collectible revenue projected at N10.84 trillion, of which only N3.89 trillion is available for the budget, funding for key sectors of the nation’s economy will only receive bits of extra from what obtained in 2012.
Some key allocations are as follows: Works, N183.5 billion; Power, N74.26 billion; Education, N426.53 billion; Health, N279.23 billion; Defence, N348.91 billion; Police, N319.65 billion; and Agriculture & Rural Development, N81.41 billion.
The president announced zero duty and tax holiday for machineries and spare parts imported for local sugar manufacturing industries, solid minerals development, commercial aircraft and aircraft spare parts imported for use in Nigeria.
He also announced women empowerment plans.
“This is a budget for every Nigerian,” the president said. “It belongs to the farmer, the investor, the entrepreneur, the youth and the elderly. Yes, we have challenges, but also incredible opportunities.”