Government budgets N4.2tr for 2011

The federal government has proposed a budget of N4.2 trillion for the 2011 financial year, with a crude oil benchmark pegged at $62 per barrel.

Capital expenditure is expected to take N1 trillion while the remaining N3.2 trillion will be gulped by recurrent expenditure.

It was confirmed that contrary to earlier reports, the federal government intends to commence a cut in the recurrent expenditure starting from the 2012 financial year. The Presidency was however still tinkering with the budget proposal ahead of its presentation to the joint session of the national assembly today.

Meanwhile, the House of Representatives, on Tuesday, approved a request by President Goodluck Jonathan to extend the lifespan of the 2010 budget to March 31, 2011.

Mr Jonathan had made the request to the National Assembly two weeks ago, following the row between the House and the Executive arm over the poor implementation of the capital component of the budget.

The House had threatened not to consider the 2011 Appropriation Bill until it was satisfied with the implementation of the capital profile of the budget. It however, rescinded the decision last week after the president’s letter.

Cutting the work force

It was learnt that the government can only cut recurrent expediture if things can be reviewed, like the downsizing of the workforce in the ministries, department and agencies (MDAs) of government; and the merging of ministries, and parastatals.

Available information also revealed that the government is looking at the prospect of voluntary retirement and payoff for civil servants who are willing to leave the service.

“All these are cost saving measures but they are things that cannot be done overnight. It is not a six months thing. The government will have to do this gradually and over time,” a top Presidency official said yesterday in an interview.

The ministry of finance, as part of steps towards the auditing of staff of the civil service and MDAs had already spent over N12 billion in building a database of staff in 16 MDAs with a view to cover all the MDAs and parastatals of government by the end of the 2011 financial year.

“This processes require time,” the source said adding that “people who will be laid off will have to be paid or provided alternative jobs. It has to be planned carefully in order for it not to have a back lash effect,” the source said.

It was however gathered that the disproportionate budgeting pattern had been a subject of concern to the Minister of Finance Olusegun Aganga, hence the setting up of a committee in September to review the expenditure pattern and advise government appropriately.

The committee, as at the time of finalising the 2011 budget proposal, was yet to turn in its report.