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Concluding part of Budget 2012 presented to the joint session of the National Assembly by President Goodluck Jonathan on Tuesday

Continued from yesterday
This underscores the need to intensify our efforts to curtail recurrent expenditure, which we have already embarked upon under the policy of fiscal consolidation as evident from the Medium-Term Fiscal Framework. The share of recurrent expenditure in the 2012 Budget proposal is 72%, down from 74.4% in 2011, and we intend to continue on this downward trend up to 2015.

The aggregate expenditure comprises N398 billion for Statutory Transfers, N560 billion for Debt Service underscoring the real need to address the rising domestic debt profile, and N2.472 trillion for Recurrent (Non-Debt) Expenditure.

We are conscious of the need to control the cost of governance. Government will streamline agencies with overlapping mandates as a way to realign public expenditure.

In this respect, I have received the preliminary report of the task force which I set up for this purpose and we shall implement relevant recommendations. We are also pursuing the biometric verification of workers and pensioners as part of our effort to control cost.

Capital expenditure has an allocation of N1.32 trillion representing a 15% increase over the amount approved in the 2011 Budget. The emphasis is on the completion of critical infrastructure projects. Based on the above, the fiscal deficit is projected at about 2.77% of GDP in the 2012 Budget compared to 2.96% in 2011. This is within the threshold stipulated in the Fiscal Responsibility Act, 2007 and clearly highlights our commitment to fiscal prudence as a way to create more space for the private sector.

This will also have a salutary effect on our domestic debt profile, which has risen significantly in recent years. We are determined to rein in domestic borrowing, and through this, ensure that our debt is at a sustainable level.

As I mentioned earlier, government has made significant progress in putting the finances of the nation on a sound footing and laying the foundation for rapid and sustainable economic growth.

Allocations to some critical sectors of the economy are as follows: Security – N921.91 billion; Power [including Bulk Trader, Nelmco, and Multi-Year Tariff Order (MYTO)] -N161.42 billion; Works – N180.8 billion; Education [excluding Universal Basic Education Commission, Petroleum Technology Development Trust Fund (PTDF)  & Education Trust Fund] – N400.15 billion; Health – N282.77 billion; and Agriculture & Rural Development – N78.98 billion. Others are: Water Resources – N39 billion; Petroleum Resources - N59.66 billion; Aviation – N49.23 billion; Transport – N54.83 billion; Lands & Housing – N26.49 billion; Science & Technology – N30.84 billion; Niger Delta – N59.72 billion; Federal Capital Territory Administration (FCTA) – N45.57 billion and Communications Technology  – N18.31 billion.

Fiscal Policy
Fellow compatriots, you will agree that the budget is not an end in itself but rather, an instrument for the promotion of economic growth, wealth creation, poverty reduction and service delivery to the citizenry. Government desires that we should begin to experience a commensurate increase in gainful employment and social well-being of Nigerians with the rate of economic growth.

This Budget seeks to act, not only to create jobs, but to also lay a solid foundation for sustainable economic growth which would deliver the dividends of democracy to our people. In this respect as you may recall, I hosted a retreat in October this year with the organized private Sector (OPS) at which a number of issues including fiscal policy were extensively discussed.

I wish to reiterate here that the principal objective of my Administration's fiscal policy in the area of tariffs and trade is to promote industrialization and the growth of the manufacturing and agricultural sectors of the economy and above all to generate employment for Nigerians.

As part of the process to realize this objective, we have commenced the review of the 2008-2012 Customs and Excise Tariffs to correct identified anomalies and introduce policies that will help in the promotion of industrialization in the country when the review is concluded. In addition, to ensure a level-playing field for businesses, this Administration, beginning from the 2012 fiscal year, will where necessary, only grant concessions or waivers on a sectoral basis. The focus of any concessions will be on expanding domestic production for local consumption and boosting exports, development of value chains, and boosting employment.

The Export Expansion Grant (EEG) scheme has, over the years, contributed significantly in the diversification of the economy through the promotion of non-oil exports. Efforts have therefore reached an advanced stage to review and streamline the Scheme to make it more effective as an instrument for the promotion of non-oil exports. We shall also aggressively pursue economic diplomacy within the framework of ECOWAS to ensure that the ECOWAS Trade Liberalization Scheme (ETLS) achieves its objective of promoting intra- ECOWAS trade and that it is not used as a vehicle for dumping goods in the region. In particular, we shall review the application of the ECOWAS Trade Liberalization Scheme (ETLS) to the oil palm and other sectors.

For some time now, especially with the advent of the consolidated salary structure, there has been agitation over the lopsided nature of the Personal Income Tax Act and the fact that the tax free allowances were inadequate. I am pleased to announce that I have signed the Personal Income Tax Amendment Act 2011 into law which amongst others has the benefit of reducing, on the average, taxes paid by low income earners and providing a more equitable tax structure for individuals. This law also provides for Tax Appeal Tribunals to listen to, and address concerns of individual taxpayers as a cost-effective administrative intervention prior to recourse to the courts.

Other fiscal changes to be gazetted shortly, include tax waivers on all bonds and related instruments issued by corporate and other tiers of Government, tax rebates as incentive to companies that create jobs, regulations to support taxpayers' self- assessment, and regulations to support the growing quest of those involved in social and community development to get tax incentives for those donating to their causes.

As you may recall, government initiated a new multifaceted National Job Creation Scheme with the provision of seed funding of N50 billion in the 2011 Budget. Implementation of this programme has commenced in earnest.

This administration believes that it is time to give Nigerian youths an opportunity to enjoy the dignity of a job, the support for innovation, the confidence to be an entrepreneur and, the sheer optimism to be an employer of labour along with the security of an income that can contribute to our economic development. We are conscious of the fact that we have the task of transforming the huge potential of our youths into real, tangible outcomes which all of our people can experience and call their own.

In this respect, government is focused on stimulating entrepreneurial activity and setting a framework for young people with creative tendencies to showcase their business acumen, build capacity and create jobs. In this spirit, and to move beyond the conventional paradigm of job creation, the Government, partnering with the organized private sector and our development partners, took bold steps to initiate the Youth Enterprise With Innovation in Nigeria (YouWin) programme which I launched in Abuja in October and has since been launched also across the six geopolitical zones.

This programme is targeted to, not only create a new generation of innovative real sector entrepreneurs in Nigeria, but, in the medium term, also generate jobs for youths across the country.

I believe that this move will drive the future technological and socio-economic development of our country. YouWin will lead to the creation of about 100,000 jobs through support to our young entrepreneurs.

Mr. Senate President, Mr. Speaker, Distinguished Senators, Honourable Members of this esteemed Assembly, the Proposal I lay before you this day seeks to sustain sound macroeconomic growth that will translate to achieving socio-economic transformation, and gainful employment for our people. But, we can only progress in this course and turn our possibilities into reality when we diligently adhere to the implementation of well thought-out and articulated developmental policies.

The 2012 Budget, as our collaborative effort, has taken the welfare of Nigerians as top priority. In an environment of global uncertainties and domestic challenges, the strong support of the National Assembly is invaluable for us to achieve our set developmental goals. As we collectively resolve to create a brighter and enduring future for all Nigerians – a future of hope and prosperity not lack, fear or hatred, we must prepare to overcome any adversity that may arise.

Accordingly, we must all be determined and committed to follow through with the difficult but balanced choices that we make in piloting the affairs Finally, I wish to appreciate the enduring partnership between the Executive and the Legislature in discharging our shared responsibility for nation-building and I note, with thanks, the patriotism, commitment and support that Distinguished and Honourable Members of this esteemed Assembly have consistently demonstrated.

Once again, I encourage us to dialogue openly, frankly and in good faith over the challenges that face us as a nation. It is my hope that the National Assembly will consider and pass the 2012 Budget Proposal expeditiously; and I foresee even more productive collaboration to the benefit of all our people.

I am indeed grateful for your kind attention.
May God bless you all, and bless the Federal Republic of Nigeria.