Nigeria-2012 Budget - Analysts in the financial service sector have said that the implementation of the proposed budget for 2012 might leave Nigerians with some hard economic choices, but necessary to create jobs. In a report made available to THISDAY analysts at First Securities Limited, said the implementation will also help conserve hard-earned foreign exchange, as government embarks on import substitution, especially in agriculture and help broaden the productive and revenue base of the economy. The analysts however regretted that the budget speech did not give details of how the deficit of about N1.105 trillion will be financed so that Nigerians could gauge its borrowing impacts on interest rates in the domestic financial market.

"But it is very clear from the speech that the Federal Government of Nigeria does not intend to increase debt excessively in order to allow private sector to develop. The reduction in the ratio of the deficits to the Gross Domestic Product (GDP) is a good omen that has the capacity to moderate interest rates.

"Beyond the quality of government's spending, the various import substitution strategies announced in the budget speech should help to conserve foreign exchange, grow external reserves and generate non-oil job opportunities within the country with its positive impacts on consumers' purchasing power, "the experts said.

The experts also predicted that there would be financing opportunities in agric and agro allied industries, maritime industry in addition to oil and gas.

"Barring any unforeseen circumstances, 2012, promises to be a good year for the Nigerian economy and the financial market. However, decline in the price of oil at the international market may make the budget implementation difficult, "the experts noted.

President Goodluck Jonathan had while presenting the 2012 appropriation to the joint session of the National Assembly said the budget was anchored on a three-point plan- Fiscal Consolidation, Inclusive Growth and Job Creation.

The budget, he stated, had four main pillars, namely Macroeconomic Stability; Structural Reforms; Governance and Institutions and Investing in Priority Sectors of the economy.

On macroeconomic stability, Jonathan said the government was determined to pursue a strong and prudent fiscal policy, manageable deficits, sustainable debt-GDP ratio of not more than 30 per cent and single-digit inflation rate.

On structural reforms, he said it was pressing forward with key reforms, including the privatisation of the power sector, deregulation of the downstream of the oil sector, as well as reform and restructuring of the ports.

He added that his administration would continue to publish the revenues allocated to the three tiers of government adding that, the passage of the Freedom of Information (FOI) Act had further strengthened the hands of the citizens in monitoring the activities of government.

He said his government would promote job creation and inclusive growth by investing in critical infrastructure, human capital development and security, including more support for the police, defence and counter-terrorism operations.

"Also, priority would be given to the information and communications technology, solid minerals development, manufacturing, aviation and creative industries in order to further develop these sectors considered to be sources of growth and job creation. In order to create jobs, the administration arrayed the following programmes to be embarked upon in 2012: Sharing risk with the banking sector by guaranteeing 70 per cent of the principal of all loans made for supply of seeds and fertilizer by private sector, "he said.

Eromosele Abiodun

This Day/21/12/2011