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2013 Budget: Jonathan Proposes N4.9 trillion Expenditure

By on October 11, 2012

President Jonathan at the National Assembly

President Goodluck  Jonathan presented the proposed 2013 budget to the National Assembly yesterday. The N4.92 trillion budget is 5% more than the N4.7 trillion budget approved for 2012.

The proposed budget contains a lion-share of N1.1 trillion budgeted for education (N426.53 billion), defense (N348.9 billion) and police (N319.65 billion).

N279.23 billion is budgeted for health, N183.5 billion for Works,  N81.1 billion for Agriculture, and N74 billion for power.

The budget was based on a benchmark of $75/barrel, a Jonathan discarded the $80 proposed by the National Aseembly saying the $75/barrel was a more scientific figure.

He said the decision was “based on a well established econometric methodology of estimating oil price moving averages.”

The N4.92 trillion budget is divided as follows:

  1. Recurrent Expenditure: N 2.41 trillion
  2. Capital Expenditure: N1.5 trillion
  3. Statutory Transfers: N380.02 billion
  4. Debt Servicing: N591.76 billion

The budget has a deficit of N1.03 trillion.

Speaking on the macro-economic realities that saw the executive cut the GDP forecast to 6.5% from the 6.85% earlier proposed in the Fiscal Strategy Framework earlier sent to the National Assembly, President Jonathan said the revision was necessary due to the impacts of the flood on the economy.

“The revision is underpinned by the fact that the severe floods experienced over large parts of the country are expected to impact on economic activity in 2013, especially Agriculture. However, the growth prospects may improve with the plan to boost dry season farming.

“Non-oil revenue is projected to continue to grow in 2013 as the ongoing reforms in our revenue collecting agencies and the implementation of initiatives to further develop the non-oil sector continue to yield results.

“Based on the above, the fiscal deficit is projected to improve to about 2.17 per cent of GDP in the 2013 Budget compared to 2.85 per cent in 2012.  This is well within the threshold stipulated in the Fiscal Responsibility Act 2007 and clearly highlights our commitment to fiscal prudence.  “We are determined to further rein-in domestic borrowing, and this way, ensure that our debt stock remains at a sustainable level,” said the president.

The President said his administration would seek a $1 billion Eurobond that would help the government complete gas pipelines and other infrastructure projects.

Mr. President said he submitted the budget proposal earlier than usual this year in other to ensure that the level of implementation was improved by his cabinet.

He said, ” I have signed Performance Agreement Contracts with my ministers with a view to ensuring delivery of projects and programmes in their respective budgets.

“The ministers in turn, are signing similar agreements with their permanent secretaries, heads of parastatals and directors to cascade down the need for responsibility and accountability. Key government officials with responsibility for implementing different aspects of the budget will be appraised based on these performance agreements,” he added.