Budget 2012: Short On Transformation

Analysts and critics and stakeholders are evaluating budget 2012.  The budget which is expected to usher in transformation is very short on capital expenditure which constitutes 28% of the budget. A chunk of budgeted sums will be heading to defense expectedly to check growing insecurity threats and upheavals.

Also, budget 2012 will be troubled by the US chopped off on foreign aids. There is ongoing rigorous debate on pushing for further spending cuts for global health programmes, humanitarian assistance, and US contributions to the World Bank, UN agencies, and other international organisations.

The Guradian Uk reported that ‘…eager to rein in government spending, the Republican-controlled House of Representatives is seeking to make further budget cuts in US diplomacy and global development programmes in 2012, following last year’s 12.5% decrease in spending. The House is looking to slice more than $1bn off last year’s $49bn budget’.

Conversely, the grim global outlook especially for Europe and their troubled banks, we expect that oil revenue flow might recede or worse still a likely mild recession could crop in anytime soon.  We have to learn to depend less on aid. With present scenarios there is going to be significant decrease in aid from the United States and Europe; there could be greater cuts in future. Experts expect trade with emerging market economies like China to grow in importance while we will be compelled to be more responsible. A rebalanced world will be unveiled.

A commentator on The Guardian UK online puts the impact on aids this way, ‘fifty years and trillions of dollars, yet almost nothing to show for it. The Nigerian Government spends $10 per capita on health care, simply because well intentioned do-gooders like you (US and Europe) let them get away with it. Cut away the aid and you’ll see them spending $100 per capita and ensuring the money gets spent (or risk the wrath of the population).’

Finally, Budget 2012 and going by the impact of trade and investment coming from emerging economies, it is critical we deepen our relationship with the countries and get them to buy into our economic vision.  We can bring the transformation vision in better focus with this.