Delivered before a Joint Session of the National Assembly, Abuja, Tuesday, 13 December 2011
I am delighted to present the 2012 Federal Budget Proposal before this esteemed Joint Session of the National Assembly. This Proposal comes at the end of a long consultative process with key stakeholders and it translates the development plans of government unveiled in theTransformation Agenda into concrete actions.
This budget is a stepping-stone to the transformation of our economy and country in our walk to economic freedom. This esteemed Assembly would agree that this path would neither be easy nor uncontested; but with a sharp focus, hard work, determination and making careful choices we will overcome.
GLOBAL ECONOMIC DEVELOPMENTS
In the past year, the global economic recovery slowed down significantly and downside risks are on the increase as many countries, particularly in the Organization for Economic Cooperation and Development (OECD), have faced serious challenges leading to fiscal retrenchment and austerity measures in the face of high and rising levels of sovereign debt.
The Euro Zone crisis in particular has time and again thrown financial markets into turmoil as several countries in this economic and monetary union continue to face difficulty in servicing their debts. On the other hand, although many emerging and developing countries, like India and China are experiencing relatively robust growth, downside risks remain as well. In fact, global growth projection has continuously been revised downward and is now 4% for 2012-2013.
These developments have implications for our economy as, aside from the impact on the inflow of Foreign Direct Investments, they could also lead to lower demand for our primary export commodity. We are living witnesses to the extent of volatility that can afflict the international oil market with prices plummeting from US$147/barrel in July 2008 to about US$38/barrel four months later. Thus, although the oil price is currently over US$100/barrel, there is no guarantee what it would be in the future.
We cannot subject the well-being of Nigerians to such large fluctuations and must therefore protect ourselves by managing our finances prudently including by adopting a conservative benchmark oil price for our budgets.
There are also uncertainties in the area of international food prices which make it imperative that we take steps to safeguard our position through policies that would promote food security. So far, the Nigerian economy has weathered these storms well but efforts need to be reinforced to ensure macroeconomic stability and sustained economic growth.