Friday, 21 December 2012

Business ready-to-go as N4.99trn 2013 budget is passed

Source: Business Day
The National Assembly has approved that the Federal Government spend N4.99 trillion in 2013. This is N63 billion more than the N4.924 trillion proposed by President Goodluck Jonathan earlier in the year.
It is a rare occurrence  since the advent of democracy in 1999 that the nation’s budget will be passed before the end of the year. It means that for the first time, the Federal Government  is in a position to start spending from the budget  from January 1, if President Jonathan assents to the bill by year-end.
Analysts say this could impact positively on the implementation of the budget in 2013 leading to better project planning and execution.
Read Full Analysis After Cut.

“This will reduce uncertainty over the outlook of the economy and make planning easier” said Ayo Teriba, MD/CEO of Economic Associates.
However Femi Muibi Saibi, post-doctoral research fellow at the University of Johannesburg, notes that his research and observation of the budget in the last few years, show that in the years that the budget has been passed early, the executive has always come up with a supplementary budget at the end of year. He recalls that this happened during the Obasanjo era.
The National Assembly however included a clause in the bill, barring the Securities and Exchange Commission (SEC) from spending from the appropriation bill.
Clause 10 of the bill states that “all revenue howsoever described, including all fees received, fines, grants, budgetary provisions and all internally and externally generated revenue, shall not be spent by the SEC for recurrent or capital purposes, or for any other matters, nor liabilities thereon incurred, except with prior Appropriation and approval by the National Assembly.”
The action by the National Assembly takes their personal grouse against Arumah Oteh,the Director- General of SEC to a new level and creates uncertainty in the capital market.
A breakdown of the budget shows that N388 billion is for statutory transfers; N592 billion is for Debt Transfer, N2.40 trillion is for Recurrent (non-debt) expenditure while N1.62 trillion is earmarked as capital expenditure.
The Federal Ministry of Works got N168 billion, the highest allocation under capital expenditure. Also, the Ministry of  Water Resources got N84 billion, Power N73 billion, Education N72 billion, Defence/MOD/Army/Air Force/Navy N64 billion, Niger Delta got N62 billion, Health  N60 billion, FCTA  N57 billion; Agriculture and Rural Development N51 billion, Office of the National Security Adviser N50 billion; Aviation  N49 billion; Transport  N45 billion; Secretary to the Government of the Federation  N34 billion; Lands and Housing N30 billion, while Foreign Affairs got N24 billion.
From the recurrent expenditure, Education got the highest allocation with N361 billion, followed by N300 billion for Defence/MOD/Army/Air Force/Navy, N295 billion for Police formation and commands, N219 billion for Health; N79 billion for Youth Development; N66 billion for NSA, N52 billion for Petroleum Resources; N47 billion for Foreign Affairs; N32 billion  for Agriculture and Rural Development, while N23 billion is for  the Presidency.
From the N388 billion approved for Statutory Transfer,  the National Assembly also got N150 billion, Universal Basic Education got N76 billion; National Judicial Council got N67 billion, Niger Delta Development Commission got N61 billion; Independent Electoral Commission got N32 billion, while the National Human Rights Commission got N1.35 billion.
The sum of N543 billion was set aside for domestic debts, N48 billion for foreign debts, N274 billion for Subsidy Re-Investment and Empowerment Programme (SURE-P); N66 billion for Presidential Amnesty Programme; N24 billion for stipends and allowances of 30,000 Niger Delta ex-militants; N38 billion for re-integration of transformed ex-militants and N546 million is for re-insertion/transition safety allowances for 3,642 ex-militants (3rd phase); N45 billion for PHCN privatisation, N20 billion refund to States for federal road projects, N50 billion for public service wage adjustment for MDAs (including arrears for promotion and salary increases) among others.
The lawmakers also passed a resolution that “all unutilised, unexecuted and unimplemented capital expenditure component of the 2012 Appropriation Act shall be rolled over and shall be construed to form part of the 2013 Appropriation Act, provided that the unutilised capital expenditure component of 2012 budget shall lapse on the 12th day of April 2013.”
John Enoh, chairman, House Committee on Appropriation, who presented the harmonised report, however tasked the Executive to be more circumspect in its budget assignments to avoid acute cases of over-budgetting on one hand, and in other instance under-budgetting.
“For instance, it was clear during our budget consideration sessions that an agency like the office of Auditor General and Public Complaints Commission, which have responsibilities across the 36 states of the federation, should continually operate under chronic funding problems. At the risk of over-beating, the oversight role and responsibility of committees of the National Assembly must assume a more than passing role, otherwise, yearly budgeting processes will remain a mere ritual.

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