Funkymallam:

@Gbawe. Last year benchmark was $75 and not $65/barrel, even u quoted a source and chose to highlight just d one that favours your argument. Must u lie to prove a point? Below is your source again.

http://sweetcrudereports.com/2011/09/16/nigeria-sets-2012-budget-on-75b-oil-price-benchmark/

My main problem here is implementation. Also that budget for ND i dnt get it.

I don't get your point? First you say last years crude benchmark was $70.00 and now you amended your post to say $75.00. Why not show a link that support your point about benchmark crude for the 2011 Budget? As far as I Know it was $65.00 unless revised upwards and I really don't know why you would suggest I am lying to prove a point.

Unless you mean that the crude benchmark for[b] 2012[/b] is $70.00 and not $75.00. Even if that is the argument and it is factual then the FG may simply have scaled down the benchmark from when it was reported in September that it would be $75.00.

holahabib:

Please can Beaf or any other GEJ/Fuel Subsidy Removal Supporter answer my humble questions below:

Is it not possible and more reasonable for Mr President to use 2012 to get the Private Sector/Investors involved to build new/rehabilitate old refineries with an MOU that by 2013 the whole market will be deregulated while he lets our fuel subsidy remain the way it is?

Is it not easier for Mr President to plug the leakages by NNPC/Fuel importers until the end of 2012 when the market will be fully deregulated? Rather than open up a new channel for new thieves in the guise of subsidy removal?

Please understand my questions below and please do not insult me or abuse the use of the internet behind your keyboard.

I think this article from EiE Nigeria (enough is enough Nigeria) deals with your concerns comprehensively.

http://saharareporters.com/press-release/eie-nigerias-statement-federal-government%E2%80%99s-games-fuel-subsidy

EiE Nigeria's Statement On The Federal Government’s Games With Fuel Subsidy
Posted: December 12, 2011 - 18:44


By EiENigeria.org
Despite the concerns raised by different groups and individuals, President Jonathan will, tomorrow, present the 2012 Budget to the National Assembly excluding the provision for fuel subsidy.

In her two appearances before the Senate Joint Committees on Appropriation, Finance and Petroleum Resources (Downstream) for the public hearing on “The Operations of the Fuel Subsidy Scheme in Nigeria,” the Minister of Petroleum represented the Federal Government’s position as follows:

The fuel subsidy structure is inefficient, costing us N600bn (~$3.75bn) in 2010 and N1.3 trillion (~$8.125bn) from Jan – October 2011. The Federal Government cannot continue to pay as it’s unsustainable. By removing the subsidy, the savings will be used to provide critical infrastructure and services. Currently, only a small percentage of Nigerians (the marketers, middle & upper-class Nigerians) benefit. When removed, more Nigerians will benefit.

In the words of a Yoruba proverb, the Federal Government has, yet again, left leprosy to treat ringworm. While we understand that the current cost structure is unsustainable, Nigerians can no longer afford to pay for government’s inefficiencies. It’s too expensive (financially; productive man hours and human lives) and it’s also NOT sustainable.

Issues to Consider


1. A lazy, thoughtless approach
The government clearly finds it easier to undertake an unwise blanket removal of subsidy than engage in the discussion of trimming the inefficiencies in fuel subsidy management and in the running cost of government. The language is also deliberately confusing – one minute it’s ‘deregulation’ and the next it’s ‘fuel subsidy removal’.



2. How much subsidy?
The Interim Report on the Process and Forensic Review of NNPC by KPMG states “Based on our analysis, subsidy over-deduction for 2007, 2008 & 2009 was estimated at N2 bn, N10.3 bn and N16.2 bn respectively. A rough estimation of subsidy payment on product losses for the period under review (2007-2009) is estimated at N11.8 billion.”
Clearly, the subsidy management regime is fraught with waste, graft and insincerity; evidence that the ‘N1.3 trillion’ does not accurately reflect the amount of petrol imported or consumed by Nigerians.

3. A matter of trust?

To counter the argument that Nigerians do not trust the government to wisely manage the ‘savings’ from the removal of the fuel subsidy, the government is planning a subsidy savings management program. The details were shared by the Vice-President in a meeting with some civil society organisations on Friday, December 9th. Why has this plan not been made public?

The questions and concerns that arise are obvious ones:

a. How does the government plan to calculate ‘fuel subsidy removal savings’?
Will these savings be the theoretical cost of the subsidy – minus cost of corruption - or the current (inflated) figure? Also, how does the government intend to remit same to this proposed quasi-government agency? Will this necessitate the setting up of another special account, in the manner of the Excess Crude Account?

b. The Obasanjo regime wound down the widely acclaimed PTF because it served as a duplication of the work of the ministries.
We agree with this approach.

c. Setting up a new body means an increase in recurrent expenditure for staffing, salaries, pensions, cars, running costs etc. This is UNACCEPTABLE.

4. No Effect on the Poor
The government’s assertion that the subsidy removal would have little effect on the poor is quite simplistic. The resultant increase in the price of PMS would drastically increase the cost of food, transportation and doing business, shutting down many small enterprises which directly or indirectly depend on the price of petrol remaining low. The middle class is the engine of growth by way of consumption and the SMEs that create jobs. Any strain on them is negative for the economy.

[size=14pt]The Way Forward
[/size]



The government should take a more measured and sustainable approach that takes into consideration all stakeholders in the Nigerian project. They need to:

1. Reduce Cost of Governance
The government must drastically cut down the cost of maintaining public and civil servants – security votes, multiple advisers, fuel guzzling convoys, excessive foreign travel and estacodes etc. Expenses such as (a) the Vice-President’s residence awarded to Julius Berger at N7 bn ($43.75m) with a request for N9 bn ($56.25m) more; (b) disbursement of N250 billion per year in ‘security votes’ to the President and Governors; and (c) a N1.7 trillion wage bill (2012 Budget) are criminal and unstainable!

2. Reduce Cost of Subsidy
Why does NNPC get 445,000 barrels of crude a day that it can’t refine? In 2006, there were 3 marketers; we now have 77. According to BusinessDay, “the increase has also been linked to this year’s elections and it has been suggested that the subsidy programme became an avenue for patronage extended to those with political connections.” Significant savings can be made on the bandied N1.3 trillion if the government will prune out the “briefcase marketers”, clean up the NNPC/PPPRA to plug waste and leakages, and tackle smuggling.

3. Restore or Sell the Refineries
This is of critical concern and priority. Increasing the capacity of our refineries would reduce the amount of fuel that needs to be imported into the country. How much has been spent on repairing the refineries in the last 12 years?

4. Provide Power
According to a 2009 report by the Nigerian Electricity Regulatory Agency (NERC), Nigerians spend N797 billion yearly to buy fuel for powering generators. In 2010, President Jonathan said the cost of fuel (to power generators) was $13 billion. NERC’s estimates 32% of generator fuel is PMS. This means Nigerians spend about $4.19 billion or N646 billion on petrol, while the rest goes to diesel. Imagine how much fuel import dependence we can curb if this government fulfills the often-repeated promise of improving power supply in Nigeria!

Why has the government not presented a policy document or engaged openly and directly with Nigerians on this issue? Why the rush to remove the subsidy when other holes have not been plugged?

Enough is Enough Nigeria will continue the conversation by hosting a public Town Hall Meeting within the next 10 days to discuss the issue. In a country that provides no social services and the average citizen provides all basic utilities – water, electricity, and security; the government cannot remove the bread from our mouths while it continues to feed fat on its princely cakes.

We will engage in words and action. Enough is enough!

ttt

holahabib:

Gbawe - I am not against subsidy removal. infact there should be no subsidy BUT before then, our refineries must be built enough to produce enough locally for us to consume.

If government is not efficient enough to engage the private sector to build refineries or give us electricity why should we be sooooo dumb to believe they will manage the "so called" savings from subsidy removal?

First things first, get our refineries functioning. At that point, subsidy will remove itself naturally.

Dude, I believe the govt wants to hands off the oil sector completely. That is the only way to curb rampant corruption, to that end there can be no long waiting period, its got to happen now. Even worse is the projection from the CBN and ministry of finance that Nigeria will collapse in 2013 if we continue with the fuel subsidy. In past govts, fuel subsidy was not much of an issue, because there was never any fuel anyway, but now that it is in abundant supply, subsidy costs have multiplied to unsustainable levels.

My prayer is that NNPC and its hoards of corrupt vampires will also be put in the trash can in the near future. That is on the cards with the PIB.

it is stupidity that makes someone to think that increment in value of
cash allocated for a certain sector is synonymous to improvement in
that sector! I hope BEAF can read clear.  Nobody wants to engage
BEAF, because of insult and trolling.


This is budget is an indication of who GEJ is. Prodigal son!!!!!

PS: Gbawe: Weldone

Same old folk tales told by our leaders.

success4:

it is stupidity that makes someone to think that increment in value of
cash allocated for a certain sector is synonymous to improvement in
that sector! I hope BEAF can read clear.  Nobody wants to engage
BEAF, because of insult and trolling.


This is budget is an indication of who GEJ is. Prodigal son!!!!!

PS: Gbawe: Weldone

You people are always the first to insult, but you cry fowl when I respond with intellectual left hooks that blind your right eye and 10 tonne staright jabs that deafen your left ear.

Beaf:

You people are always the first to insult, but you cry fowl when I respond with intellectual left hooks that blind your right eye and 10 tonne staright jabs that deafen your left ear.

@BEAF

You are a troll and an intellectual midget. If you think this is the best way to represent your principal - then he is wasting his money (tax payers money).

Instead of focusing on people's concerns and defending this pathetic budget you go on the attack. It is now clear that you are employed as an online attack dog.

If you are intellectually competent why not answer people's questions? But you are incapable of doing so, that's why you resort to moroonic insults like the cretin you are.

People who actually run businesses and employ people need this information to budget and plan for next year and instead we have a half-wit come online and spew filth. Keep playing with your feces, cretin.

GEJ should give me the 'Tear Gas' contract - he will need alot of the stuff next year.

GEJ - RIP,

@Gbawe. My first source was saying $70/barrel but when i read tru ur source againg, it said $75/barrel.
This is ur source again:

http://sweetcrudereports.com/2011/09/16/nigeria-sets-2012-budget-on-75b-oil-price-benchmark/

Pls, read d second paragragh again and see they were comparing d numbers of b/d @ d same $75/b benchmark adopted in d 2011 budget.
Thnx

Where is the saved fuel subsidy in the 2012 budget? Is GEJ going to create another PTF like body? Will the budget for the agency not pass through the national assembly? I thought we would see an extra N1.3trillion on capital projects to account for fuel subsidy removal.

Then there is the issue of exchange rate. What was the 2011 budget based on in comparison with the 2012 budget?

GEJ's antecedents does not give much hope that this budget will change the lives of Nigerians and I hope I am proved wrong.

N98bn Virement (unbudgeted in 2011) requested is higher than half the sectors
GEJ asked for a N98bn virement last month (November 2011). This virement is more than he has budgeted on Agric (N79bn), Niger Delta (N59bn), Petroleum resources (N59bn), Transport (N55bn), and Aviation (N50bn).

N5bn robotic equipment is 10% of Abuja budget
GEJ is reported to be spending N5bn on Aso Rock robotic bomb detectors. This amount is over 10% of the FCT total annual budget of (N45bn). May be a sensible amount to spend but lack of transparency means we do not know if this is true and on what it is being spent on

Debt now N5.3trn (more than 2012 budget), N500bn added in six months
Nigeria’s domestic debt as at 30 September was N5,317,995,945,000.00 (N5.3trn) and we are servicing this debt in 2012 at N561bn. And we think this makes sense. Domestic debt at 31 March was N4.8trn. GEJ has added N500bn in six months (ie N83bn borrowed every month) despite the debt being serviced. What was the N500bn addition spent on?

N1.35trn drop in external reserves fall (from $40bn to $31.8bn)
Under GEJ’s watch our external reserves have fallen by $9bn or N1.35trn


Naira value has dropped from N151 to a dollar to N161 to a dollar

We are not living under a military dictatorship but a civilian president. I wish GEJ well and do pray for his success as his failure will affect all 160m of us. But this budget as broadcast is uninspiring, I pray I am proved wrong.

After all the posts, arguments and insults, mark this: this 2012 budget implementation and effects will even be worse for Nigeria. Not so much for the money but the brainlessness of the daftest president and most fooliesh leadership till date in Naija.

Sometimes I wonder why Nigeria has an economic problem given all these economic analysts on NairaLand who always talk like they know better than those at the helm of affairs.

What an iota of truth!Beaf thinks He is an intellectual mount zoin

To those who say the budgetary allocations does not matter much, I guess you have little or no insight into how 'business angels' and OPS go about their investment decisions.

The budgetary allocation is as much as important to the organized private sector as much as the implementation of the budget is to the ordinaty citizenry.

By allocation nearly 20% of the budget to Security, a sum far higher than that of works, education combined, this government is sending a very wrong signal to the markets that she does not know what her priorities are.

Beside, spending such a huge amount of money on security with vast majority going towards payment for hard and softwares bought of self from other economies, that is a real waste! As both Iraq and Afghanistan war have proven, combatting terrorism is more of local intelligence gathering using crude techniques than deploying hi-tech gadgets.

If my memory serves me right, the SFG claimed (albeit an attempt to rubbish ASUU's image and curry public sympathy )ASUU was requesting the FG pay her a whooping N106bn for allowances and other expenses, assuming the FG settles to pay half of that amount, so what's left of the budget for Education

I think Sam Omatseye's article on Ngozie's lack of  'economic domestication' is now ever so true with this budget.

With depressing budget like this, I doubt if Nigeria will ever achieve the vision 20:20:20 or attain the BRINC status!

@the budgdt speech, of course GEJ knew the budget was empty hence the reason He never bothered breaking down the figures to Nigerians and explaining how those figures will be expended.

When one listen or watch budget presentation in the UK parliament by the chancelloe ex-chq. you see the government hammering out figures on projects and programmes for the parliamentary years -5years, hence telling the citizenry where their money will be and how it will be spent. THE CASE OF NIGERIA IS ALWAYS DIFFERENT. The never tell you during budget presentation, claiming the details are in the budget but by the time the house delibrating on the budget, sums/figures either get jacked up or are missing entirely!

GEJ should tell us what HE will be spending nearly N1tn security budget on. Are buying 205 Chinese fighter jets enmasss again? Or are we going to order 12 fridgets ,

In absolute terms the 2012 budget is less than the 2011 budget. The 2012 budget is only 6% more than the 2011 budget but the inflation rate is around 9% and the exchange rate will likely depreciate further to about N170 - N180 to the dollar.

Meanwhile oil export is projected to increase and the oil bench mark has also increased from $65 to $75.

I am personally not bothered about what sector the money goes as all Nigerians' sector is down at the moment. The most important thing is that the money is used for what it is allocated to and not squandered by the thieves.

ttt

wirinet:

In absolute terms the 2012 budget is less than the 2011 budget. The 2012 budget is only 6% more than the 2011 budget but the inflation rate is around 9% and the exchange rate will likely depreciate further to about N170 - N180 to the dollar.

Meanwhile oil export is projected to increase and the oil bench mark has also increased from $65 to $75.

I tell you, the more one looks at the budget in relative terms with present and projected economic indices,the more depressing it gets!

Maybe the office of budgeting, economic planning, statistics and finance are working with different figures than we know off!

Security: N921.91 Billion (Roughly US$5.7bn on defence or security.  The biggest sector in the budget) - defence was N348bn in 2011 budget?
Education: N400.15 Billion
Health: N282.77 Billion
Works: N180.8 Billion
Power: N161.42 Billion
Agriculture: N78.98 Billion
Niger Delta: N59.7 Billion
Petroleum Resources: N59.66 Billion
Transportation: N54.8 Billion
Aviation: N49.23 Billion
FCT : N45.59 Billion
Water Resources: N39 Billion
Science and Tech: N30.84 Billion
Land and Housing: N24.9 Billion
Communication and ICT: N18.31 Billion
TOTAL FOR OTHER SECTORS = N2,438.9bn
UNALLOCATED ITEMS = N2,310.1bn (this is a rounding figure to match up to the total budget)
TOTAL BUDGET = N4,749bn


Hmm, why do I see so much loopholes in this budget?

1. Security/Defense --- N921 Billion? Damn, although I would support this amount for security and defense, though, I won't be quick to notice the difference in change from last years budget of N348 Billion. That's a 265% sharp increase, that increase is quite aggressive, thanks to Boko Haram. I hope this budget should be able to purchase UAV's, modern fighter jets as well as other defense and security equipments.

2. Education --- 400 Billion? With the current failures in the system, strikes, poor facilities et al plaguing the system, that amount is way small but looks decent. Let us hope, it's not actually 400 billion on paper while N40 Billion is actually spent.

3. Health--- I have no comment on this, I have always been an advocate that healthcare should be left to the jurisdiction of states only. However, if this is to supplement state healthcare, I might agree other than that, no comment.

4. Works --- Someone help me out in this, does this mean infrastructural works et al? If that's it, this is absolute crazy. What nation aspiring to be among the G-20 spends about $1.1billion in infrastructures? With decaying, old infrastructures, that budget should be at least 5x the amount.

5. Power --- We need aggressive, and radical improvement in the power sector, and $1billion won't cut it. According to some figures on the net, if it cost about $1,500 to build 1MW of electricity, with this budget, that means we are anticipating the FG to add at least 1,000 MW of electricity. However, not bad considering the fact the FG has lifted ban and states can start generating electricity.

6. Agriculture --- Agriculture represents more than 40% of our GDP and what could be budgeted so far was N78 billion. Well, at least it's decent, notwithstanding, I was expecting way more up the chart. If we're gonna improve our FOREX, we need to place emphasis on Agriculture and its manufacturing.

7. Niger Delta --- Does this include money that goes to MEND? If it is, something is missing, I sure don't see Boko Haram, OPC et all on the list, nevertheless, if it isn't, forgive my ignorance.

I would have continued, but let me stop but so far, I'M NOT IMPRESSED AT ALL.

900 trillion for security ? That means tha we the protesters must get ready to fight them

The Retardeens govt has proven beyond all doubt that he is the most clueless in human history

If we are fighting Boko haram with 20% of our budget, Assuming we are at war with another country, How much would have been budgeted for defence? maybe 80%

Clueless art thou Odechukwu Retardeen

ibide:

900 trillion for security ? That means tha we the protesters must get ready to fight them

Fight with who? Can't you read the handwriting on the wall? For every weapon they have, they will have 2.5x more now, I hope they sure use it on Boko haram and not poor innocent folks who wants to make a living. In addition, you the protesters can't fight them fire for fire because money has increased and definitely changed hands.

@ VoodooDoll
i don't know if your info are correct but thumbs up for a good way of analyzing
we need more of that and less of name calling.
well done

1. Security/Defense --- N921 Billion? Damn, although I would support this amount for security and defense, though, I won't be quick to notice the difference in change from last years budget of N348 Billion. That's a 265% sharp increase, that increase is quite aggressive, thanks to Boko Haram. I hope this budget should be able to purchase UAV's, modern fighter jets as well as other defense and security equipments.

Fighter jet for Boko Haram? They will spend it on Armoured Vehicles for Dame and her lady in waiting, the rest will be used to massage france,uk,USa's ego, the GEJ will be getting 'positive; mentions from Obama,Sarkozy n co in return for their ailing defence companies and SSS will be arresting more bloggers at the airport

None of the analysts have been impressive so far - none is objective, just name calling and bias for GEJ and his government. Let some reasonable people analyze not just people who have even not read the budget but just picks on 900billion on Defence and security. Is it a new thing that Defence and Security takes the largest chunk of the Nigerian budget?

sh!t

The budget of my university is bigger than education and health combined for a nation! My university's budget this year was $3.5billion (univeristy of washington) which is approximately N500billion. Just for a university!

Nigeria is not at war yet almost a NTrillion would be spent on defense within 365 day, not that we are going to send rocket to moon or fight in foreign land. Nigeria We hail Thee.

2.5billion Per day on defence.

Retardeed art thou Odechukwu