2013 FGN Budget-

Implications for Macro-Economic Objectives

by Adedoyin Salami (PhD)
Content
Summary of 2012
Key Elements of 2013 budget
Implications for Macroeconomic Objectives
Short Term objectives Short Term objectives
Medium term Objectives
Long term Objectives Outlook
What might 2013 look like?
2
Data Acknowledgements
IMF International Monetary Fund
WB World Bank
NBS National Bureau of Statistics
OPEC Organisation of Petroleum Exporting Countries
CBN Central Bank of Nigeria CBN Central Bank of Nigeria
WEF World Economic Forum
3
Executive Summary
2012 Year of Unrealized Expectations
The assumptions on which the budget proposals for 2012
were made largely unrealized
Assumption Outturn
Output Growth (%) 7.20 6.58
Price Inflation (%) 9.50 12.2
4
Price Inflation (%) 9.50 12.2
Oil Prices Bonny Light (US$/barrel) 72 113.7
Oil Output (Mbd) 2.48 2.056
Exchange Rate (N/US$) 155 157.4
Weak global environment, flooding and the domestic cost of
reform were the factors which created the observed
divergence
Executive Summary- 2013 FGN budget
President assents to 2013
budget just before the 30
day deadline
House of Reps threatened to
override Presidents veto if
budget was not signed
BUDGET ASSUMPTION
Benchmark oil price(US$/barrel) 79
Oil production(mbpd) 2.53
budget was not signed
The budget was passed as an
agreement was reached
between the Executive and
Legislature
A supplementary budget is
underway
5
Exchange Rate(N/US$) 160
GDP Growth(%) 6.5
Aggregate Expenditure( N Trillion) 4.987
Fiscal Deficit(NTrillion) 1.037
Key Elements of the FGN budget for 2013 Key Elements of the FGN budget for 2013
6
Key Elements of the 2013 FGN Budget
Benchmark oil price(US$/barrel) 79
Oil production(mbpd) 2.53
Exchange Rate(N/US$) 160
Gross federally collectible revenue(N Trillion) 10.840
Oil Revenue(N Trillion) 7.25
Non-oil Revenue( N Trillion) 3.298
VAT( N Billion) 945
7
VAT( N Billion) 945
FGN Independent Revenue 447
Aggregate Expenditure( N Trillion) 4.987
Capital Expenditure( N Trillion) 1.54
Recurrent Expenditure( N Trillion) 2.41
Statutory Transfer(NBillion) 387.92
Debt Service 591.76
GDP Growth(%) 6.5
Fiscal Deficit(NTrillion) 1.037
Source: 2013 Budget Speech
Sectoral Allocation of FGN Spending-less would be
spent on housing, health and transport
SECTOR 2012
(NBn)
2013
(NBn)
Difference
(NBn)
% Change
Education 397
427 30 7.6
MDG Programmes and Projects 3
8 5 166.7
Finance and Investment 12
14 2 16.7
Environmental Development 21
21 0 0.0
Environmental Development 21
Water Supply and Resources 38
47 9 23.7
Housing and Urban Development 26
24 -2 -7.7
Health 280
279 -1 -0.4
Agriculture 78
81 3 3.8
Power 72
74 2 2.8
Transport 54
52 -2 -3.7
Aviation 48
53 5 10.4
8
Source: Various Budget Speeches
At NGN11.25trn, budget by the State Governments and the 2013 FGN
budget spending is 6.3% higher than in 2012
2013 2012
FGN Spending Proposals NGN 4.987trn 4.857trn
State Government Spending Proposals NGN 6.259trn 5.724trn
Total NGN11.246trn 10.581trn
Spending as % of GDP 22.23 24.53
Fiscal policy in 2013 Higher nominal spending, but
lower than inflation and consolidating if GDP grows as
projected
Spending as % of GDP 22.23 24.53
The nominal increase in spending is below the increase in output. In
other words, the share of government spending in total expenditure
looks set to fall
Furthermore, allowing for inflation, projected at 9.76%, announced plan
show lower than inflation spending plan
Expansion cannot be ruled out as
Actual spending has typically outstripped budget proposals
withdrawals continue to be made from Excess Crude Account (ECA)
9
Expansionary Fiscal Policy
Fiscal Policy likely to be expansionary
Given production observed in 2011, effective budget benchmark price of
oil is US$108
Budget benchmark for FG budget raised by National Assembly and assented by the president from
US$75/barrel proposed by the Federal Government to US$79
Possibility of FG acceptance of raise in interest of reducing policy uncertainty
Announced State Budgets already showing 9% uplift compared to 2012 Announced State Budgets already showing 9% uplift compared to 2012
which is at per with inflation rate for January
Applied across all States, Implies aggregate State-level spending rising from
NGN5.74trn to NGN6.24trn
10
Fiscal Policy 2013 Will oil prices and
volumes support spending plans
Production is the critical budget assumption for 2013
FGN Proposals assume 2.53mbd
Production figures for 1
st
3qtrs of 2012 show production at approximately
2.1mbd
Revenue projections in the revised budget amount to US$72.952bn
Key question Is the revenue assumption realistic?
Using 2.1mbd as oil output Using 2.1mbd as oil output
Total revenue amounts to US$60.553bn production a shortfall of 32%
At this level of production, price would have to be US$108/barrel to realize the
revenue assumptions
Price assumption may also be suspect given changing dynamics of oil market
lower American imports (EIA forecasts that US imports will decline to
approximately 6mbd by 2014), new discoveries and investments in Shale Oil
Political uncertainty is the only basis for keeping oil prices where they
are US$90 may be the new cap for oil prices!!!
Fiscal Cliff approaching for Nigeria!!!!!!!!!!!
11
2013 FGN Budget-Allocation to housing
declined
Budget allocation to the housing sector declined by 7.7%
from N26bn in 2012 to 24bn in 2013.
We have an housing deficit of about 12 to 16 million units
it is the intent of the government to allow for more private
participation participation
the ability of the Federal Government to put structures in place to
ensure that Nigerians are not exploited is however daunting
However, the effect of this will trickle down to the Real estate sector
as more private involvement will result to less government
bureaucracy
12
Infrastructure Capital Expenditure- mixed
outcomes in 2013
0
50
100
150
200
2009 2010 2011 2012 2013
N
'
b
i
l
l
i
o
n
power
recurrent capital
0
100
200
300
400
2009 2010 2011 2012 2013
N
'
b
i
l
l
i
o
n
Education
recurrent capital
0
50
100
150
200
250
2009 2010 2011 2012 2013
N
'
b
i
l
l
i
o
n
Health
recurrent capital
13
recurrent capital
0
50
100
150
2009 2010 2011 2012 2013
N
'
b
i
l
l
i
o
n
Transportation
recurrent capital
recurrent capital
0
10
20
30
40
2009 2010 2011 2012 2013
N
'
b
i
l
l
i
o
n
Information and Telecoms
recurrent capital
recurrent capital
Fiscal Framework 2012 - 2015
FISCAL ITEMS
2011 Budget 2011 Budget
Amendment(N'B) Amendment(N'B) 2012 Projection(N'B) 2012 Projection(N'B) 2013 Projection(N'B) 2013 Projection(N'B) 2014 Projection(N'B) 2014 Projection(N'B) 2015 Projection(N'B) 2015 Projection(N'B)
KEY PARAMETERS, ASSUMPTIONS & INDICATORS
Average Budget price per barrel (in US$) 75 70 70 70 70
Average Exchange Rate (NGN/US$) 150 155 155 155 155
Total Production (mbpd) 2.3 2.48 2.55 2.575 2.6
GROSS FEDERALLY COLLECTIBLE REVENUE 9,152.25 9,406.06 10,097.19 10,949.97 11,566.50
Total Oil & Gas Revenue 6,815.45 6,403.40 6,506.34 6,638.33 6,922.10
Total Non-Oil 2,151.27 2,741.15 3,300.31 3,998.48 4,329.15
Special Levies for Targeted Expenditure 93.62 164.67 187.07 209.06 211.33
Other Non-Federation Account Items - Education
Tax 91.91 96.83 103.47 104.09 103.92 Tax 91.91 96.83 103.47 104.09 103.92
SUMMARY OF FAAC & VAT POOL
FGN 3,241.36 3,230.14 3,435.32 3,700.25 3,921.38
STATES 1,957.46 1,965.11 2,135.21 2,384.19 2,546.55
LGCs 1,482.89 1,487.67 1,613.29 1,795.65 1,916.62
Total 6,681.71 6,682.92 7,183.82 7,880.08 8,384.55
FGN BUDGET REVENUE (INFLOWS)
Unspent balance from previous FY 120 232.79 232.79 232.79 232.79
FGN BUDGET Share of Federation Account (48.5%) 2,882.08 2,867.40 3,034.79 3,241.36 3,428.60
FGN BUDGET Share of VAT (14%) 103.5 107.90 129.71 167.56 184.14
FGN Independent Revenue 228.93 393.46 480.81 515.89 528.04
Estimated FGN's Balances of Special Accounts end
Dec. 13.61 43.11 30.18 31.56 33.58
Total 3,348.12 3,644.66 3,908.28 4,189.17 4,407.14
14
Source: Various Budget Speeches, Ministry of Finance
Implication on Implication on
Macroeconomic Objectives
15
Macro-Economic Objectives
Economic
Development
Stability
Economic Growth
16
Macroeconomic
Objectives
Development
Equitable Income
Distribution
Balance of
Payment
Reduction in
Unemployment
Rate
Economic Growth
2
Formal Institutions
Constitution Law
Regulations
Actors
Capacity
Government
Budget
process-
Formulation
Budget
Outcomes-
Pro-poor /
Consistent
with plan
Pro-poor/
Pro-poor/
Consistent
with plan
Pro-poor/
Not
Budget Interaction
17
Capacity
Constraints
Commitment
Interests
Incentive
Legislature
State govts.
Political parties
Oversight
agencies Public
Civil society
Informal Institutions-
Political bargaining
Patronage
Constituencies
Allegiances
Business interests, etc
Implementation
Scrutiny, oversight
& Evaluation
Pro-poor/
Not
Consistent
with plan
Not
Consistent
with plan
Source: Lagos Business School,
Edward Kingston Research
Achievement of Macroeconomic
Objectives
2013 FGN Budget-Fiscal Consolidation Policy with
Inclusive Growth
The fiscal Consolidation Policy which aims at minimizing deficit without
accumulating more debt that the government started adopting since 2012
will help to strengthen our finances.
the sinking fund of N100 billion is being established for repaying Governments
maturing debt obligations and to curb the rising domestic debt profile.
annual domestic borrowing has been reduced from N852 billion in 2011, N744
billion in 2012, and to N727 billion in 2013.
the fiscal consolidation would have a greater impact on lowering interest rates and the fiscal consolidation would have a greater impact on lowering interest rates and
unlocking credit than easing monetary policy in the medium term would.
The amount of capital expenditure in the total budget is increasing as
recurrent expenditure is gradually reducing
Modest governance cost saving
The government aim at Reducing the cost of governance by reviewing the
recommendations aimed at rationalizing Agencies of the Federal Government with
overlapping functions and was taken into account in the preparation of the 2013
Budget
18
On Stability the reduction in inflation
The attempt made by government to cut down on expenditure would
complement the efforts of the monetary policy authority at maintaining
stability in the economy.
The pursuit of single digit inflation remains the primary objective of monetary
policy
Policy context in 2013 defined by
Possible (likely?) expansion of fiscal policy, Possible (likely?) expansion of fiscal policy,
Structural Inflation is also likely to pose a challenge in 2013
the task of monetary policy in this context is to prevent aggravation of price pressures
Attracting capital inflows (at least, using market instruments to prevent capital
outflows)
Striking a right balance for the exchange rate to ensure reserve protection
Furthering reform of the financial system
It is clear from the tone and content of MPC communiques that
monetary policy is unlikely to be accommodating
19
Cost of borrowing moderating
Nigerias debt continues
to be sought far and
beyond despite
moderating yields
The announcement of the
inclusion of FGN bonds in
Barclays Emerging Market
inclusion of FGN bonds in
Barclays Emerging Market
Local currency government
bond index this month has
improved the credit rating
and increased investors
appetite for FGN bonds
Has implication for the
Eurobond to be floated later
this year
21
On Stability the reduction in inflation
The attempt made by government to cut down on expenditure would
complement the efforts of the monetary policy authority at maintaining
stability in the economy.
The pursuit of single digit inflation remains the primary objective of monetary
policy
Policy context in 2013 defined by
Possible (likely?) expansion of fiscal policy, Possible (likely?) expansion of fiscal policy,
Structural Inflation is also likely to pose a challenge in 2013
the task of monetary policy in this context is to prevent aggravation of price pressures
Attracting capital inflows (at least, using market instruments to prevent capital
outflows)
Striking a right balance for the exchange rate to ensure reserve protection
Furthering reform of the financial system
It is clear from the tone and content of MPC communiques that
monetary policy is unlikely to be accommodating
22
Sovereign Wealth Fund- better late than never
Now with US$1
billion, Nigerias SWF
accounts for 0.05% of a
US$5.3 trillion global SWF
market, and 0.03% of
specific oil and gas
65
175.5
538.1
715.9
Libya
Russia
Saudi
Arabia
Norway
Sovereign Wealth Fund
specific oil and gas
related global SWFs
(valued at US$3.1 trillion).
Nigerias SWF is the fifth
largest of eight oil funds
in Africa, but continues to
rank low amongst other
oil producing states.
23
0.069
1
5
56.7
65
0 200 400 600 800
Ghana
Nigeria
Angola
Algeria
Libya
$ Billions
C
o
u
n
t
r
i
e
s
Source: World BANK, Edward Kingston Associated
FGN Budget, Inflation and Growth
Year
Budget
(trillion Naira)
Inflation
Rate
Real GDP Growth
Rate(%)
2008 2.9 11.98 5.98
2009 2.87 11.97 6.96
24
2009 2.87 11.97 6.96
2010 4.07 13.59 7.98
2011 4.971 10.91 7.43
2012 4.749 11.98 6.58
2013 4.987 9.76 6.75
Age - group, Sex and Sector (2011)
Educational Level Urban Rural Composite
Never Attended 19.0 22.8 22.4
Primary School 15.5 22.7 21.5
Modern School 14.5 27.5 24.3
VOC/COMM 34.5 27.0 28.7
JSS 16.6 36.9 33.4
Unemployment across educational qualifications-
no respecter of degrees
25
JSS 16.6 36.9 33.4
SSS 'O LEVEL' 13.9 22.5 20.1
A LEVEL 34.1 29.7 31.0
NCE/OND/NURSING 17.2 22.5 20.2
BA/BSC/NHD 16.8 23.8 20.2
TECH/PROF 5.0 27.9 20.6
MASTERS 3.2 8.3 5.1
DOCTORATE 11.1 7.7 9.1
OTHERS 31.3 36.1 35.5
Source: NBS, Socio Economic Survey Unemployment 2011
What might 2013 look like? What might 2013 look like?
26
Global Environment: 2013, a better year ahead-
although with possible intermittent landmines
While a tentative recovery is visible in the global economy, a
number of fiscal-related issues in the developed countries
remain and are likely to impact growth in the coming
months
the budget impasse in the United States
sequester could change the direction austerity survival sequester could change the direction austerity survival
UK looses top credit rating from Moodys
China becomes worlds top oil importer as "Shale revolution
reduces United States need to import crude
Prospect for commodity prices likely to depend on activity
and climatic conditions
Food prices likely to remain strong as climatic conditions expected
to remain uncertain and prone to excesses
27
.2013 a better year ahead-
Activity growth in Nigeria will be better than in
2012 driven by recovery in the non-oil sector.
Nigerias GDP growth this year 2013 projected by the NBS to be
6.75%, compared to 6.58% actual growth in 2012 and a Q4 growth
of 6.99%. of 6.99%.
Non-oil sector continues to be the major driver of the economy
expanding slower at 7.88% in 2012 compared to 8.80% in 2011.
Non-oil activities in 2012 fell as a result of the effect of subsidy removal,
flooding and insecurity caused by Boko Haram.
The Non-oil sector is however in recovery mode as output grew from
7.55% in Q3 2012 to 8.21% in Q4 2012
Oil sector growth decelerated to -0.91% in 2012 form 0.14% in 2011.
28
Output already in recovery mode, 2013
likely to build on 2012 successes
29
Agricultural sector credit finally improving-
reforms to encourage more investment
30
Source: CBN
Domestic Conditions- activity growth expected
in key areas
Policy Outlook
Fiscal Policy likely to be expansionary
Trade policy likely to be driven by
import-substitution strategy
Despite continuing fragility in the
global economy, activity growth
in Nigeria will be better than in
Real GDP (%)
(Nigeria)
2011 2012 2013F 2014F
World Bank 6.7 6.5 6.6 6.4
IMF 7.36 7.07 6.74 6.61
in Nigeria will be better than in
2012 driven by recovery in key
sectors Agriculture, Telecoms,
Nigerias GDP growth this year 2013
projected by the NBS to be 6.75%,
6.73% (WB), 6.74(IMF) and our
projection at Edward Kingston is
6.9%.
IMF 7.36 7.07 6.74 6.61
NBS 7.43 6.58 6.75 7.27
31
E represents estimate; F for Forecast
IMF International Monetary Fund
NBS National Bureau of Statistics
Inflation unlikely to be a problem, exchange
rate to stay within band
Inflation should be less of a problem.
Inflation inched down to 9% in the month of January from 12% December 2012
and is expected to remain as a single digit.
Exchange rate expected to remain stable especially in the face of Crude
Oil Prices which should be above the budget benchmark and improving
reserves accretion
Sectors to look out for in 2013 include:
Agriculture- Large Scale commercial Agriculture- Large Scale commercial
Wholesale and Retail(FMCG)
Spurred by rising incomes and the development of the railways
Oil and Gas-especially post PIB
Manufacturing
Against the backdrop of an improvement in the power sector
Telecommunications
Infrastructure(transport, Power) -Energy reforms likely to be key
Commercial Real Estate
Against the backdrop of organized retail and rising income concentration
32
2013 FGN Budget: Drivers of Economic Growth
Development of Non-Oil Sectors
Reform Agenda
Continuing progress and investment in the Energy sector
Progress in the power Sector
Passage of Petroleum Industry Bill (PIB)
Assumption that No further progress on Price Deregulation (budgetary provision of NGN971bn made
in 2013 budget; unlike 2012 when no provision was made)
Agricultural Sector
Budgetary allocation to the Agricultural sector improved by 3.8% from N78bn in 2012 to N81bn in 2013
Resolution of security issues and subsidence of effect of flooding. Resolution of security issues and subsidence of effect of flooding.
Nigeria is looking to become more self-reliant again for food security, and increase local content
in our manufacturing processes.
Movement to market philosophy
Evidence of increasing investment (especially Fertilizer) and access to credit
Improvement in Infrastructure-
An early passage into law would have afforded the country ample time to plan ahead and take
advantage of the dry season for the implementation of capital projects.
Changing Spending Pattern
Women and Youth empowerment-
Recovery in private consumption
Squeeze on household consumption from fuel price increases absent in 2013
Strong diaspora inflows increase in 2012 to US$24bn placed Nigeria recipient of 5
th
larger inflow
Expansionary fiscal policy stance in prospect
33
FGNs priority Sectors
Policies geared towards import substitution - measures that
took effect from January 2013 include:
Agriculture
NIRSAL intervention fund of USD 500million to be invested in the agricultural
sector
Fiscal Policies implemented in 2013 include: Fiscal Policies implemented in 2013 include:
Sugar
Raw Sugar-levy:50%, duty:10%
Refined Sugar-levy: 60%, duty: 20%
Machinery and Spare parts imported for the establishment of local
sugar manufacturing industries shall attract zero percent import duty.
Rice
Brown and Polished Rice levy:100%, duty:10%
34
FGNs priority Sectors
Transportation
Commercial and Aircraft Spare parts to attract an import duty rate
of zero percent.
Import VAT- 0 %
Import duty rate on Completely Knocked Down components for
Mass Transit Buses have been reduced from 5% to 0% Mass Transit Buses have been reduced from 5% to 0%
Solid Minerals
Machinery and equipment imported for the development of solid
minerals to attract an import duty rate of zero percent.
Import VAT- 0 %
35
FGN 2013 Budget and the achievement of the FGN 2013 Budget and the achievement of the
Millennium Development Goals
36
Budget allocation to the millennium goals and projects
increased by 166% from N3bn in 2012 to N8bn in 2013
Nigeria continues to rank low in its attainment of its Millennium
Development Goals when compared with other countries
Budget Allocation increases to meet up with the
Millennium Development Goals
Development Goals when compared with other countries
37
average performance in meeting the
MDGs
Will target
be met?
Potential
MDG 1: Eradicate extreme poverty and hunger
Target Halve, between 1990 and 2015, the proportion of people whose income is less than one dollar a day. Average
Target : Halve, between 1990 and 2015, the proportion of people who suffer from hunger Average
MDG 2: Achieve universal primary education
38
MDG 2: Achieve universal primary education
Target: Ensure that, by 2015, children everywhere, boys and girls alike, will be able to complete a full course of
primary schooling Average
MDG 3: Promote gender equality and empower women
Target : Eliminate gender disparity in primary and secondary education preferably by 2005 and to all levels of
education no later than 2015. Average
MDG 4: Reduce child mortality
Target : Reduce by two-thirds, between 1990 and 2015, the under-five mortality rate. Average
Note: Good potential, Average Potential, and Weak potential refer to the potentials of the targets being met.
MDG indicators with good potential have better potential of been realised by 2015 due to their progress over
the course of the years, than those with Average and Weak respectively.
Source: 2010 Millennium Development Goals Report
average performance in meeting the
MDGs
MDG 5: Improve maternal health
Target: Reduce by three-quarters, between 1990 and 2015, the maternal mortality ratio Average
Target: Achieve, by 2015, universal access to reproductive health. Average
MDG 6: Combat HIV/AIDS, malaria and other diseases
Target :Have halted, by 2015, and begun to reverse the spread of HIV/AIDS. Good
Target: Have halted, by 2015, and begun to reverse, the incidence of malaria and other major diseases. Average
MDG 7: Ensure Environmental sustainability
Target : Integrate the principles of sustainable development into country policies and programmes and reverse the
loss of environmental resources. weak
Target : Halve, by 2015, the proportion of the population without sustainable access to safe drinking water and
basic sanitation. weak
MDG 8: Develop a global partnership for development
Target : Deal comprehensively with the debt problems. Good
Target : In cooperation with the private sector, make available the benefits of new technologies, especially
information and communication technology Good
Note: Good potential, Average Potential, and Weak potential refer to the potentials of the targets being met.
MDG indicators with good potential have better potential of been realised by 2015 due to their progress over
the course of the years , than those with Average and Weak respectively.
39
Source: 2010 Millennium Development Goals Report
GDP per person employed (constant 1990 ppp US$)
50
60
70
80
Employment to population ratio, 15+, total (%)
25000
30000
35000
MDG - Goal 1: Eradicating Extreme Poverty and
Hunger-Nigeria seems not to be making progress
40
0
10
20
30
40
50
2006 2007 2008 2009 2010
%
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0
5000
10000
15000
20000
2006 2007 2008 2009 2010
U
S

$
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Source: United Nations
Consistency between budget provisions and
extreme poverty and hunger alleviation
Alleviation of hunger made the Agricultural sector on of the priority Sectors
Allocation to the agricultural sector increased by 3.8% from N78bn
Favourable agricultural policies like the Nigeria Incentive-Based Risk Sharing System for Agricultural
Lending (NIRSAL) which will guarantee 75% of loans by DMB s to farmers up to a ceiling of N600M
also state governments contribution to the sector
The goal of creating 3.5million jobs by the government in agriculture in 2013 is probably feasible
Employment generation Employment generation
The sustainability of the YouWIN Programme; the Community Service Women and Youth
Empowerment Programme (established in Feb 2012).
The graduate internship Programme (part of the Subsidy re-investment Programme Sure-P), in which
enrolled private companies provide one-year internship to 50,000 graduates who apply to the
scheme.
41
15
20
25
Proportion of seats held by women in national
parliaments (%)
60
70
80
90
Ratio of Female to male Labour participation Rate(%)
Goal 3:Promoting Gender Equality and Empowering
Women- No improvement in gender equality
0
5
10
15
2006 2007 2008 2009 2010 2011
%
brazil china india malaysia nigeria turkey
42
0
10
20
30
40
50
2006 2007 2008 2009 2010
%
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Source: United Nations
N3 billion to be disbursed to participating MDAs as incentives for them to deliver on
integrating women into 5 pilot ministries Agriculture, Health, Communication
Technology, Water Resources and Works. These ministries are signing MOUs with the
Ministry of Women Affairs to deliver on specific services for women.
The Ministry of Agriculture- ensure that 5 million women farmers and agricultural entrepreneurs receive mobile
phones to be able to access information on agro-inputs through an e-wallet scheme.
The Ministry of Health- scale up the ongoing Save a Million Lives initiative; give back health and hope to one-third
of the pool of young girls and women who have been waiting for Vesicovaginal Fistula (V.V.F) repairs through surgery
and economic rehabilitation.
Women Empowerment to improve Nigerias
human development indicator- N3bn set aside
and economic rehabilitation.
The Ministry of Works- scaling up the number of women that are employed in public works programmes as
contractors, workers and project evaluators, setting itself a target of 35% for women in FERMA rehabilitation work. In
every geopolitical zone, at least 3 roads leading to areas where womens socio-economic activities are
concentrated, will be prioritised and completed.
To support these activities, we have set aside the sum of N3 billion to be disbursed to participating MDAs as
incentives for them to deliver on these targets. Our focus on empowering women is part of our agenda for improving
the countrys human development indicators. In this regard, we shall not relent in our efforts to improving access and
quality in our health and education sectors.
43
20
25
30
Terrestial protected areas (% of total surface)
brazil china india malaysia nigeria turkey
80
100
120
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Goal 7: Ensuring Environmental Sustainability-
performance still remains the same over the
years
44
0
5
10
15
2006 2007 2008 2009 2010
p
e
r
c
e
n
t
0
20
40
60
2006 2007 2008 2009 2010
p
e
r
c
e
n
t
Source: United Nations
80
100
120
Improved sanitation facilities (% of pop with access)
.. Ensuring Environmental sustainability
45
0
20
40
60
2006 2007 2008 2009 2010
%
brazil china india malaysia nigeria turkey
Source: United Nations
Budget allocation to the educational sector increased from N397bn in
2012 to N427bn in 2013.
This 7.6% increase in budget could go along way if properly channeled towards
Increase in budget allocation to the Educational
Sector
This 7.6% increase in budget could go along way if properly channeled towards
empowering the youths to be entrepreneurs
46
Save a Million Lives initiative, plans to give back health and hope to one-third of the pool of
young girls and women who have been waiting a long time for V.V.F repairs through surgery
and economic rehabilitation
Besides, we are up-scaling routine immunization and driving aggressively towards the
eradication of polio.
Decrease in budget allocation to the health
Sector
47
Nigeria continues to rank at near the bottom of
the financial development index
48
The Human Development Index for
Nigeria in 2011 is 0.459 the position of the
country is 156 out of 187 countries and
territories.
Between 2005 and 2011, Nigerias HDI
Turkey
Iran
Mexico
South Korea
Average HDI (2006-2010)
The Human Development Index
Between 2005 and 2011, Nigerias HDI
value increased from 0.429 to 0.459 an
increase of 7.0 percent of an annual
average of about 1.1 percent.
49
0.000 0.200 0.400 0.600 0.800 1.000
Nigeria
Bangladesh
Pakistan
Vietnam
Indonesia
Egypt
Philippines
N
1
1

C
o
u
n
t
r
i
e
s
Vision 2020 infrastructure financing
Sector Proposed Amount (2010 -
2013)
Total Spend
Social Development N 25.243 billion NA
Power N880.978billion NA Power N880.978billion NA
Transport N242billion N2.216 trillion
Oil and Gas N571.163 billion NA
Housing N461.73 billion N2.825 trillion
Education N611.658 billion. NA
Health N487.448 billion NA
Source: Vision 2020
50
Thank you for your attention
51
Appendix A Fiscal Framework 2012-2015 Appendix A Fiscal Framework 2012-2015
52
Fiscal Framework 2012 - 2015
FISCAL ITEMS
2011 Budget 2011 Budget
Amendment(N'B) Amendment(N'B)
2012 2012
Projection(N'B) Projection(N'B)
2013 2013
Projection(N'B) Projection(N'B)
2014 2014
Projection(N'B) Projection(N'B)
2015 2015
Projection(N'B) Projection(N'B)
KEY PARAMETERS, ASSUMPTIONS &
INDICATORS
Average Budget price per barrel (in US$) 75 70 70 70 70
Average Exchange Rate (NGN/US$) 150 155 155 155 155
Total Production (mbpd) 2.3 2.48 2.55 2.575 2.6
GROSS FEDERALLY COLLECTIBLE REVENUE 9,152.25 9,406.06 10,097.19 10,949.97 11,566.50
Total Oil & Gas Revenue 6,815.45 6,403.40 6,506.34 6,638.33 6,922.10
Total Non-Oil 2,151.27 2,741.15 3,300.31 3,998.48 4,329.15
Special Levies for Targeted Expenditure 93.62 164.67 187.07 209.06 211.33
Other Non-Federation Account Items - Education Other Non-Federation Account Items - Education
Tax 91.91 96.83 103.47 104.09 103.92
SUMMARY OF FAAC & VAT POOL
FGN 3,241.36 3,230.14 3,435.32 3,700.25 3,921.38
STATES 1,957.46 1,965.11 2,135.21 2,384.19 2,546.55
LGCs 1,482.89 1,487.67 1,613.29 1,795.65 1,916.62
Total 6,681.71 6,682.92 7,183.82 7,880.08 8,384.55
FGN BUDGET REVENUE (INFLOWS)
Unspent balance from previous FY 120 232.79 232.79 232.79 232.79
FGN BUDGET Share of Federation Account
(48.5%) 2,882.08 2,867.40 3,034.79 3,241.36 3,428.60
FGN BUDGET Share of VAT (14%) 103.5 107.90 129.71 167.56 184.14
FGN Independent Revenue 228.93 393.46 480.81 515.89 528.04
Estimated FGN's Balances of Special Accounts
end Dec. 13.61 43.11 30.18 31.56 33.58
Total 3,348.12 3,644.66 3,908.28 4,189.17 4,407.14
53
FISCAL ITEMS
2011 Budget 2011 Budget
Amendment(N'B) Amendment(N'B)
2012 2012
Projection(N'B) Projection(N'B)
2013 2013
Projection(N'B) Projection(N'B)
2014 2014
Projection(N'B) Projection(N'B)
2015 2015
Projection(N'B) Projection(N'B)
FEDERAL GOVT. OF NIGERIA BUDGET
FGN REVENUE (INFLOWS) 3,348.12 3,644.66 3,908.28 4,189.17 4,407.14
Less
Statutory Transfers 417.82 397.93 356.31 365.8 383.79
- NJC 95 85 85 85 85
- NDDC 56.08 54.69 57.8 61.67 65.3
- UBE (2% CRF) 64.57 68.24 73.51 79.13 83.49
- INEC 52.18 40 40 40 50-
- NASS 150 150 100 100 100
...Fiscal Framework 2012 - 2015
- NASS 150 150 100 100 100
Sub-Total 417.82 397.93 356.31 365.8 383.79
Debt Service Recurrent 495.1 559.58 591.76 491.53 462.97
- Service on Domestic Debt 450.01 511.98 543.38 446.62 423.39
- Service on Foreign Debt 45.09 47.6 48.39 44.91 39.59
Sub-Total 495.1 559.58 591.76 491.53 462.97
- MDA Spending 3,571.82 3,791.59 3,913.11 4,110.56 4,222.13
Of which:
Non-Debt Recurrent 2,425.07 2,471.81 2,528.98 2,564.47 2,566.05
- Personnel Costs (MDAs) 1,506.11 1,655.12 1,680.22 1,756.48 1,756.48
- Overheads 288.05 260.6 260.6 260.6 260.6
- CRF Pensions 154.75 169.01 184.48 193.71 195.29
- Multi-Year Tariff Order 37 50 50 0 0
- Other Service Wide Votes 439.16 337.08 353.68 353.68 353.68
Sub-Total 2,425.07 2,471.81 2,528.98 2,564.47 2,566.05
54
Fiscal Framework 2012 - 2015
FISCAL ITEMS
2011 Budget 2011 Budget
Amendment(N'B) Amendment(N'B)
2012 2012
Projection(N'B) Projection(N'B)
2013 2013
Projection(N'B) Projection(N'B)
2014 2014
Projection(N'B) Projection(N'B)
2015 2015
Projection(N'B) Projection(N'B)
Capital Spending 1,146.75 1,319.78 1,384.13 1,546.09 1,656.08
Aggregate Expenditure 4,484.74 4,749.10 4,861.18 4,967.88 5,068.89
Fiscal Deficit -1,136.62 -1,104.44 -952.9 -778.72 -661.75
GDP 38,427.06 39,904.26 46,714.32 54,788.42 64,377.49
DEFICIT/GDP -2.96% -2.77% -2.04% -1.42% -1.03% DEFICIT/GDP -2.96% -2.77% -2.04% -1.42% -1.03%
Deficit Financing 1,136.62 1,104.44 952.9 778.72 661.75
- Sales of Government Property 0 0 0 0 0--
- Privatization Proceeds 16.91 10 0 0 0
- FGN's Share of Signature
Bonus 42.44 75 50 50 50
- Sharing from Stabilisation
Fund Account (ECA) 225 225 150 150 150
- New Borrowings 852.27 794.44 752.9 578.72 461.75
- Domestic Borrowing 852.27 794.44 752.9 578.72 461.75
Financing Deficit/Surplus 0 0 0 0 0
55
Appendix B Vision 2020 Appendix B Vision 2020
56
Nigeria and Vision 2020
Nigerias Vision 2020s intent is to position Nigeria to become one of the top 20 economies in the world by
2020
The key parameters of vision 2020 include;
Macro-Economy: A sound, stable and globally competitive economy with a GDP of not less than $900
billion and a per capita income of not less than $4000 per annum.
Agriculture: A modern technologically agricultural sector that fully exploits the vast agricultural
resources of the country, ensures national food security and contributes to foreign exchange
earnings. earnings.
Health: A health sector that supports and sustains life expectancy of not less than 70 years and
reduces to the barest minimum the burden of infectious and other debilitating diseases
Manufacturing: A vibrant and globally competitive manufacturing sector that contributes
significantly to GDP with a manufacturing value added of not less than 40%
Infrastructure: Adequate infrastructure services that support the full mobilization of all economic
sectors, which includes power, transport, oil and gas infrastructure, housing and water resources.
Education: Modern and vibrant education system which provides the opportunity for maximum
potential, adequate and competent manpower
Polity: Peaceful, harmonious and a stable democracy.
57
Vision 2020
The various sectors were grouped into different thematic areas:
Physical Infrastructure: This area covers Power, Transport, Oil and Gas, infrastructure,
Housing and Water Resources.
Productive Sector: This area covers Agriculture and Food Security, Trade and Commerce,
Manufacturing, Small and Medium Enterprises. Solid Minerals, Oil and Gas, Culture and
Tourism, and the Film and Entertainment Industry.
Human Capital Development: This area covers Education, Health, Labour and Human Capital Development: This area covers Education, Health, Labour and
Productivity, Sports Development, Food and Nutrition, Youth Development, Women and
Child development and social protection and safety nets.
Developing a knowledge based economy: This area covers Information and
Communication Technology, Postal Services and Science Technology and Innovation.
Government and General Administration
Regional Geopolitical Zone Development
58
Physical Infrastructure
This thematic area covers 5 key sectors: Power, Transport, Oil and Gas infrastructure, Housing and Water Resources
Power: Aggressive rehabilitation of power installations, expansion of generation, transformation, and distribution
networks, It also involves widening the scope of Independent power Projects(IPP), feasibility studies for alternative
energy sources. The Federal Government proposed an investment of N813.760billionapproximately and minimum
target of 16,000MW during the plan period.
Transport Sector(Roads, Railways, Ports, Inland waterways and Airports):To develop an intermodal transportation
network which will link rail, sea, air and road network in strategic locations across the country thereby, introducing
efficiencies in the distribution of goods and services.
Oil and Gas Infrastructure Development Strategy: Prioritization of gas infrastructure expansion across the country
during the plan period, with the gas infrastructure network from Calabar to Ajaokuta through Umuahia and from during the plan period, with the gas infrastructure network from Calabar to Ajaokuta through Umuahia and from
Ajaokuta to Kano through Abuja and Interconnector pipelines from Obiafu/Obrikom in the East to Oben node in the
West to increase gas supply to the west and create redundancy in the system. This will also help to provide alternative
supply nodes to the frequently vandalized Escravos-Lagos Pipeline System (ELPS) pipeline. The target is to increase
the transportation of gas, crude oil and PMS via pipelines. The major strategies are to construct new, and rehabilitate
aging pipelines
Housing Development: construction of 600,000 Housing units by the Federal Ministry of Housing, 240,000 units by
the Federal Housing Authority and 500 prototype units by the Public private partnership (PPP) across the federation,
the provision and equipping of building materials testing workshops as well as the re-capitalization of the Federal
Mortgage Bank of Nigeria. The proposed allocation, during the plan period is N250.500 billion.
59
Power
The sectoral goals include;
The broad vision is to meet the demand for adequate and sustainable power in all sectors by the
Nigerian economy and in all parts of the country at affordable costs
To generate, transmit and distribute 35,000MW of electricity by the year 2020.
The strategic objective is to ensure that the sector is able to efficiently deliver sustainable, adequate,
qualitative, reliable and affordable power in a deregulated market, while optimizing the on and off-
grid energy mix.
To ensure that the electricity supply industry will ultimately be private sector driven. To ensure that the electricity supply industry will ultimately be private sector driven.
In the medium term, the goal is to generate, transmit and distribute 16,000MW of
electricity by 2012 the overall target for the plan period is to increase electricity
generation, transmission and distribution from the 3,700MW capacity as at December,
2009 to 8,000MW by 2010, and 16,000MW by 2013.
The total proposed investment in the sector, during the Plan period is N880.98billion.It covers
investment in four major areas: power generation; transmission; distribution; and alternative
energy. This is a critical infrastructure for a sustainable economic growth and development.
60
Transport
The sectorial goals:
To evolve a private sector led multi-modal and integrated transport system
To create an enabling environment for Public Private Partnership (PPP) through enactment of
appropriate legislations, policies, design an Institutional framework that will support the envisaged
positive transformation of the sector
To ensure that transport services are adequate to meet the social and economic needs of the
country, and to provide an effective instrument of national development
To ensure that the transport system is developed and operated in an integrated manner that To ensure that the transport system is developed and operated in an integrated manner that
promotes the efficient use of resources within the sector to improve productivity and enhance the
level of service provided to Nigerians
To provide a safe, efficient and cost effective transport service for the country
To develop the capacity to sustain and continuously improve the quality of transport infrastructure
and service delivery in the country.
The estimated total investment for the transport sector during the Plan period is
approximately N2.216 trillion. The figure has been disaggregated on annual basis and by
subsector. The subsectors are: roads; railways; inland waterways; ports and airports
development.
61
Housing
The sectorial goals:
Creation of enabling environment for private sector investment in housing development
Provision of adequate public building policy for effective service delivery
Establishment of national housing data bank
Harmonization and standardization of land administration process nationwide through a national
technical development forum
Work with States and Local Governments to produce and implement a unified and integrated Work with States and Local Governments to produce and implement a unified and integrated
infrastructure development for housing, to open up new layouts and provide site and services for
private sector to develop affordable and decent mass housing.
Work with financial sector operators and regulators to develop an effective primary housing finance
system, and facilitate linkage of that market to the capital market to provide long term affordable
and sustainable liquidity for housing.
Embark on land reform to facilitate private sector investment in housing.
The proposed total estimated investment for the Housing sector, during the Plan period
(2010 to 2013) is N461.73 billion. It is expected that an intensive housing programme will
expand the construction sector, mortgage market and increase the quality of life of
Nigerians.
62
Agriculture and Food Security
Sectorial goals:
To Secure Food and Feed Needs of the Nation by increasing agricultural productivity to a 3-fold by
2015 and 6-fold by 2020.To transform the Nigerian agricultural production system to a substantially
mechanized system by 2020. and also expand dairy production and milk yield from less than 2,000 kg
to 5,000kg per cow per lactation by 2015.
To enhance generation of National and Social Wealth through greater Exports and Imports
substitution.
To enhance Capacity for value addition leading to Industrialization and employment opportunities To enhance Capacity for value addition leading to Industrialization and employment opportunities
Efficient Exploitation and Utilization of available Agricultural resources
Enhance the development and dissemination of appropriate and efficient technologies for rapid
adoption
The proposed total estimated investment for the Housing sector, during the Plan period, is N461.73 billion.
It is expected that an intensive housing programme will expand the construction sector, mortgage market
and increase the quality of life of Nigerians.
63
Oil and Gas
The Vision aims to increase crude oil production and refining capacity to stimulate local
value-addition and to put the country in a position to meet its domestic demand for refined
products and even export refined products.
To develop the gas sector to meet domestic and industrial demand and to take advantage of
global markets.
The proposed investment in the Oil and Gas down stream and up-stream activities under the
productive sector for 2010 to 2013 is approximately N571.163 billion productive sector for 2010 to 2013 is approximately N571.163 billion
64
Manufacturing
The main aim of vision 2020 for the manufacturing sector is building a
vibrant and growing manufacturing sector which can create competitive
advantages in the face of rapidly increasing globalisation.
65
Education
The goal of Vision 2020 in education sector is to ensure that all children, irrespective of
ethnicity, gender, or disability, complete a full course of basic education which is 12 years of
formal education comprising three years of Early Childhood Care Development and Education
(ECCDE), six years of primary schooling and three years of junior secondary schooling.
To establish a modern and vibrant education system that ensures the maximum development
of the potentials of individuals and promotes a knowledge-driven society that propels the
nations development.
providing access to quality education at all levels, improved learning and teaching
infrastructure with greater emphasis on science, information technology, technical,
vocational education and training.
66
Labour, Employment and Productivity
Sectorial goals include:
Creating job opportunities for Nigerians and enhancing labour productivity
Formulating appropriate implementation framework, structure and
governance for productivity improvement ( skill development and productivity
enhancement schemes)
Formalizing the informal economy to boost employment generation Formalizing the informal economy to boost employment generation
Enhancing industrial peace and harmony, and the protection of workers
67
Women Affairs and Social Development
Goals related to women Affairs and Social Development
Include:
Reducing violence against women
Empower and support women to improve their income
Promote gender equity and significantly bridge gender divide in all aspects of
the economy the economy
Develop mechanism to increase socio-economic and socio-political
participation of women.
Improve the Health status of Women
68
Telecommunications
Sectoral Goals
Developing a sufficient, efficient and affordable ICT infrastructure to accelerate and
sustain economic growth and development
A rapid ICT penetration and diffusion for efficient and affordable service across the
socio-economic sectors of Nigeria
Develop globally competitive indigenous human capital and Knowledge based Products
and Services in targeted areas of ICT (software, hardware, networks, card technologies, and Services in targeted areas of ICT (software, hardware, networks, card technologies,
security/biometrics, web and digital content development, etc)
Deploy ICT in government for transparency and accountability as well as to enhance
efficiency, effectiveness and increase government capacity on services to attain national
competitiveness.
Promote research and development (R&D) activities to stimulate and sustain innovation
in ICT solutions.
Develop the ICT industry for the production of software and hardware to global
standards.
69
Appendix C Acceleration of Credit Appendix C Acceleration of Credit
in Sectors
70
Finance &
Insurance
Solid Minerals
Government
Agric. Sector
Public Utilities
DMBs Credit to sectors Q2:
'10
Finance &
Insurance
Manufacturing
Exports
Government
Agric. Sector
DMBs Credit to sectors Q3:
'10
Finance &
Insurance
Agric. Sector
Transport &
Communication
Manufacturing
Exports
DMBs Credit to sectors Q3: '10
Acceleration of Credit-2010
71
-200 -100 0 100 200
Credit to Others
sectors
Transport &
Communication
Manufacturing
General
Commerce
Exports
Real Estate &
Construction
Source: Edward Kingston Research
-200-100 0 100
Credit to Others
sectors
General
Commerce
Transport &
Communication
Solid Minerals
Real Estate &
Construction
Public Utilities
Source: Edward Kingston Research
-150 -50 50
Credit to Others
sectors
Public Utilities
Government
General Commerce
Real Estate &
Construction
Solid Minerals
Source: Edward Kingston Research
Source: CBN
Solid Minerals
Agric. Sector
Transport &
Communication
Manufacturing
Exports
DMBs Credit to sectors Q1:
'11
Finance &
Insurance
Credit to Others
sectors
Manufacturing
Transport &
Communication
Exports
DMBs Credit to sectors Q3:
'11
Credit to Others
sectors
Finance &
Insurance
General
Commerce
Agric. Sector
Public Utilities
DMBs Credit to sectors Q4: '11
2011-Credit to Real Estate and Construction on a
decline, manufacturing on an increase
72
-300 -100 100
Government
Public Utilities
Real Estate &
Construction
General
Commerce
Finance &
Insurance
Credit to Others
sectors
Source: Edward Kingston Research
-300 -200 -100 0 100 200
Public Utilities
Government
Real Estate &
Construction
Solid Minerals
General
Commerce
Agric. Sector
Insurance
Source: Edward Kingston Research
-100 0 100 200 300
Government
Real Estate &
Construction
Exports
Manufacturing
Transport &
Communication
Solid Minerals
sectors
Source: Edward Kingston Research
Source: CBN
Agriculture employs the largest proportion of
the labour force
73