By Governor Nyesom Ezenwo Wike
It is once again my honour to present to this Honourable Assembly the Budget of our administration for fiscal year 2017.
Before I proceed, let me appreciate this August Assembly for the positive roles you have played and continue to play in our shared responsibility to move Rivers State forward.
Despite the economic and political challenges, we have every reason to thank God, not only for the excellent cooperation that exists between our co-equal arms of government, but also, for what we have collectively achieved for our people.
Mr. Speaker, when we assumed office, our economy was in complete shambles. Apart from the low revenues from the federation account, we were also faced with serious other developmental challenges.
However, in the last 17 months, we have taken some measures to improve the governance process, overcome the head winds and stabilize our economy.
Today, we can say with a great sense of satisfaction that we have recorded delightful and verifiable achievements in some of the critical sectors of our restoration agenda.
We have significantly improved security of lives and property across the State and rolled out an ambitious infrastructure development programme. We have completed several existing roads projects, built new roads and significantly improved the business climate. We are reconstructing roads, schools, jetties and restoring the beauty and tourism potential of the State.
As a result, we have created hundreds of jobs, empowered families and engendering the recovery of our economy, which is fast gaining pace and things are getting better in the State and for our people.
For the first time in a long while our workforce and retirees received their salaries before Christmas even as we remain among the very few States that are up-to-date with payment of salaries to civil servants and pensioners, just as the roads and streets have never been this good and glowing at night.
It is important to state that these achievements did not come by accident; they are the by-products of hard work, careful and focused planning and efficient management of available resources, and above all, the prayers, sacrifices and cooperation of our people.
Mr. Speaker, moving forward, we would like to take further steps to consolidate these gains and propel the State to greater heights in the months and years ahead.
This is why we are here to present our budgetary proposal for 2017, which clearly defines and articulates our path to achieving economic growth and accelerating development within the framework of our structured agenda to build the new and better Rivers State.
THE ECONOMIC OUTLOOK FOR 2017
Mr. Speaker, as a sub-national unit, our budget is, as usual, predicated on Nigeria’s macroeconomic environment.
As we all know, in 2016, the national economy was generally subdued by low productivity, low export of crude oil, low oil price at the international market, high inflationary pressures, and a drastic fall in the value of the naira. The interplay of these challenges remain critical to our economic and budget outlook for 2017.
Although the national economic horizon is still parlous due to the slowdown in economic activities, and would remain so for some time to come, we appreciate the measures the Federal Government has taken to stimulate an end to the recession sooner than later.
Nevertheless, we are very optimistic about the State’s economic prospects for 2017 just as we have taken necessary measures to mitigate against shocks that could potentially derail our development agenda, including the unpredictability associated with our dependence on federal allocations for our budgets.
Against this background, we decided to be as pragmatic as possible in our budget assumptions for 2017, even as we will continue to be positive and forward-looking.
Accordingly, we are fixing the baseline of our 2017 budgetary projections on a daily oil output of 2.1 million barrels at a benchmark price of $40 USD per barrel as against the Federal Government’s projections of 2.4 million barrel daily oil export at $45 USD per barrel benchmark price. This leaves us with a buffer allowance of $5 USD to mitigate against the volatility of the international oil market and the existing domestic threats to optimum production and export of crude oil.
In addition, we intend to continue to implement our development agenda based on a fiscal framework that focuses on:
a strong drive for increased internal revenue generation through enhanced tax reforms;
ensure effective restraint on recurrent expenditures, while shifting resources from non-priority areas to the most critical areas of need and economic growth; and
iii. ensure prudency and efficiency in the management of public resources and service delivery.
As we have often stated, the days of wasting scarce public resources on frivolities or unviable social and economic programmes are over for good.
We have demonstrated in the last 17 months that focusing on real priorities not only delivers progress but also enables us to do more with less, and we will not deviate from this position in 2017.
Furthermore, we shall continue to encourage, support and attract private-sector investments, both local and foreign, in the diverse sectors of our economy to create well-paying jobs, reduce poverty and improve the socio-economic conditions of our people.
Finally, having substantially reduced our exposure to multilateral debt obligations, we intend to ensure that internal and external borrowing are kept within reasonable levels and channel a major part of capital expenditures toward funding strategic infrastructure, healthcare, education and other priority programmes to accelerate economic growth, expand economic opportunities and empower our people.
With these and other policy measures, we hope to ensure value for money spent and deliver better services for our people in 2017.
REVIEW OF THE 2016 BUDGET
Mr. Speaker, in 2016 we proposed a total revenue projection of N307, 000,000,000, to be funded by the Federation Accounts Allocation Committee revenue receipts of N115, 000,000.00, the 2015 closing balance of N16.1 billion, a total credit of N52 billion, and Internally Generated Revenue (IGR) of N120, 000,000,000.
The N115 billion Federation Account receipts proposed for the year 2016 was made up of Statutory Allocation of N30.8 billion, 13% Mineral Fund of N69.1 billion, Value Added Tax (VAT) of N11.3%, NNPC refunds of N1billion, Exchange gain of N2.3 billion and Capital receipt of N0.4 billion.
However, as at September this year, we realized N92.5 billion out of the N115 billion expected from the Federation Allocation Accounts for the year, representing 80.5% in terms of actual budget performance. Similarly, we realized N73.5 billion of IGR collection out of the N120 billion proposed for the year, representing 61.3% in terms of actual budgetary performance.
Out of the N235 billion aggregated FAAC and IGR revenue proposal in 2016, we recordedN166.1 billion actual receipts as at the end of September, representing 70.6%, amounting to over 73% of the total revenue performance for the year 2016.
Further breakdown showed that a total of N120 billion was approved for recurrent expenditure out of which the sum of N55 billion was to cater for salaries, N18.1 billion for the payment of pension and gratuity while overhead cost stood at N14.5 billion.
However, actual expenditure indicated that N58, 867,099,782.17 representing 31.3% of the total recurrent expenditure was spent on salaries, N9, 755,554,089.00 representing 5.2% of the total recurrent expenditure was expended on overhead, while 11,448,686,908.20 had been spent on pensions as at September 2016.
This means that apart from the overrun on salaries, the expenditure for the payment of pensions and overhead cost was below the approved values. On the aggregate, the sum of N76, 313,624,479.21, representing 63.59% of the approved sum has been spent on recurrent expenditure as at September 2016.
With regards to capital expenditure, the sum of N187 billion was approved for the 2016 financial year, with the following sectoral allocations: 15.5% or N29,042,275,000 was allocated to the Administration Sector, 29.1% or N76,326,194,480 was allocated to the Economic Sector, 0.41% or N770,000,000 went to Law and Justice Sector and 28.4% or N53,207,500,000 to the Social Sector.
The significant increase in the capital expenditure as compared to the recurrent expenditure was indicative of our commitment to stimulating economic growth and development through substantial investments in infrastructure with its multiplier effects on other sectors of the economy.
However, out of the approved aggregate capital expenditure, what was actually expended as at October 2016 was 107,649,716,589.21, representing 63.3% of the approved sum for 2016.
Mr. Speaker, on the aggregate, the 2016 budget recorded about 60 per cent performance, which was a significant improvement over 2015, although it should have been better. We hope to improve on this performance in 2017 all things being equal and by God’s special grace.
THE 2017 BUDGET PROJECTIONS
Mr. Speaker, our projected revenue projection for 2017 financial year is N470, 000,000,000.00(Four Hundred and Seventy Billion Naira) only.
Rivers State will be 50 years old next year, and to herald this historic landmark, we have christened the 2017 budget “the Golden Jubilee budget for accelerated development.”
This budget is premised on the need to consolidate on our achievements for 2016 and restore the State’s economy back to a sustained growth path and expand economic opportunities for all. To this end, this budget is underpinned by the following basic principles:
First, enhancing the business environment, including tackling the security challenges for the private sector to grow, expand our tax revenue base, and drive our economy through the value chain into becoming one of the largest economies in West Africa;
Second, committing a greater proportion of available resources towards infrastructure development and public works to stimulate economic growth, create employment and reduce poverty;
Third, scaling up resources to improve the quality of education and health care delivery throughout the State with a view to enhancing the educational and health needs of our people;
Fourth, creating economic opportunities for our youth and women and empower them to exploit and participate in the economic development of the State; and
Fifth, strengthening governance systems for a balanced development and efficient service delivery.
Financing the 2017 Budget
Mr. Speaker, the 2017 budget will be funded from revenue receipts from: (i) the Federation Account Allocation Committee (FAAC), (ii) the 13% Derivation proceeds, (iii) Value Added Tax (VAT), (iv) Reimbursements, (v) Internally Generated Revenue (IGR) and (vi) Domestic credits.
We are projecting an aggregate sum of N220, 000,000,000.00 (Two hundred and Twenty billion naira) from FAAC, distributed as follows: N23 billion naira from Statutory Allocation. N102 billion naira from 13% mineral derivation fund, N16.6 billion naira from VAT, N8 billion exchange gain, N70 billion for Paris Club and other reimbursements, and N400 million naira from capital receipts.
We are also projecting to generate an aggregate sum of N168, 857,926,276.00one hundred and sixty-eight billion, eight hundred and fifty-seven million, nine hundred and twenty-six thousand, two hundred and seventy-six naira) from IGR.
Our ambitious revenue target from IGR is underpinned by the improving business environment, the envisaged efficiency in our tax system and the new taxes to be introduced from the 1stof January 2017.
Recurrent Expenditure
The breakdown of the proposed budget shows that a total of N141, 000,000,000.00 (one hundred and forty-one billion naira) is proposed for recurrent expenditure. Out of which the sum of N62 billion naira is earmarked for personnel emolument, N20 billion naira is for the payment of pensions and gratuities, overhead costs is expected to gulp N17 billion naira, while N3billion will be used to service FGN Bonds.
Capital Expenditure
The total projected capital expenditure for 2017 is N329 billion (three hundred and twenty-nine billion naira) only, which represents 70% of the capital estimate to the projected budget volume and gives a capital to recurrent expenditure ratio of 70:30.
In terms of sectoral allocation, the projections shows that N14.160 billion is allocated to the administrative sector; N115.245 billion is allocated to the economic sector, N125.630 billion s allocated to the social sector, while N3.050 billion is allocated to the Law and Justice sector; and N70.915 billion is allocated to special heads.
The unprecedented increase in the capital expenditure, once again, underscores our commitment to direct substantial resources to the critical growth sectors of our economy, including addressing infrastructure gaps to accelerate economic growth, secure the State and improve the wellbeing of our people.
PRIORITIES OF THE 2017 BUDGET
Mr. Speaker, as indicated above, the 2017 budget strategy is designed towards aligning expenditures to priorities that best support our economic transformation agenda. Accordingly, the following priority areas will receive preferential call on all our revenues for 2017:
Security of lives and property;
Infrastructure development and maintenance;
Education,
Healthcare delivery, and
Empowerment.
Security of life and property
Mr. Speaker, as we all know without security it will be difficult for us to govern effectively and achieve development objectives. Thus, tackling insecurity and reducing the crime rate to the lowest minimum remains one of our top priorities.
In the last 17 months, we have worked hard and invested substantial resources to equip and empower the security agencies, including the rehabilitation of 20 Armoured Personnel Carriers, and providing over 130 patrol vehicles, to control insecurity and combat crime across the State.
As I speak, we have also acquired another 40 pickup vehicles, six Armored Personnel Carriers and ten Gunboats, which we intend to deliver to the security agencies to enhance their capacity to provide adequate security cover for the State.
While we have recorded significant improvements in the State’s security situation as a result of these efforts, we know that security is an open-ended activity. We will therefore continue to support the security agencies to ensure that individuals, communities and investments are totally safe and well-secured.
For this purpose we have allocated N15, 000,000,000.00 to the security sub-sector in the 2017 budget to be used to improve the existing security architecture, including the provision of logistics to enhance the capacity of the security agencies to investigate, monitor, identify and track down criminals and secure the State for all of us to live in peace and security.
Accelerating infrastructure development
Mr. Speaker, no State or nation can be transformed without substantial investments in infrastructure development.
While we have achieved significant milestones with our infrastructure restoration and advancement programme, there is the challenge to complete all ongoing construction project as well as embarking on new ones to close the existing infrastructure gap.
To this end, and as part of our programme to stimulate economic growth, we have allocated the sum of N77,409,275,000.00, representing nearly 40 per cent of total capital expenditures to the Ministry of Works to accelerate the development and expansion of infrastructure throughout the State in 2017.
Provision of quality education
Mr. Speaker, as we strive to overcome the challenges of development, we must also resolve to focus our attention on the quality of education as a matter of priority.
For far too long, we have failed to work the talk on the poor quality of education that in our public school system, especially at the basic level, which continues to fail and dash the hopes of parents. The irony is that most of us holding or have held high public offices were educated in public schools.
This remains unacceptable, and for us, the time has come to change this ugly narrative and give our children, the leaders of tomorrow, a better educational foundation that can equip and empower them to be highly productive citizens and contribute to national development.
This is what we have pledge to accomplish for our people, and so far, we have started well since we assumed office. Apart from the regular payment of salaries to our teachers and the provision of instructional materials, we have also started the phased reconstruction of secondary schools across the State.
Already, the rehabilitation of Government Girls Secondary School, Rumuokwuta, Birabi Memorial Grammer School, Bori, and Nyemoni Grammar School, Abonnema has reached advanced stages and we shall, God willing, commence piloting the reintroduction of boarding systems with these schools by the 2ndquarter of 2017.
We also intend to rehabilitate and comprehensively equip more secondary and vocational schools across the State with ICT and other learning devices and laboratories, as well as build the capacity of teachers to deliver effective teaching in a conducive learning environment. We also intend to upgrade teaching and learning infrastructure in all our tertiary institutions.
To this end, we have allocated the sum of N30 billion to the Ministry of Education for 2017 to invest in providing educational infrastructure and improving the quality of education in the State
Quality and Efficient Healthcare Delivery
Mr. Speaker, we do acknowledge that health is a measure of wealth, therefore, investing in quality healthcare delivery is pivotal to developing a healthy State with a healthy and active population.
Before this administration, our healthcare delivery system was in a deplorable condition, while health infrastructure, especially the general hospitals, were abandoned to rot completely.
However, we have since kick-started our restoration action plan for the health sector with the ongoing reconstruction of 13 general hospitals across the three senatorial districts of the State
In making healthcare deliver one of our cardinal priorities for 2017, our plan is to provide efficient health infrastructure in all parts of the State and raise the quality of healthcare to our people in collaboration with other tiers of government, the Private sector, and our development partners.
In this regard, we will give attention to our primary health institutions and equip them to serve as the first port of call for health services. We will also complete and equip the general hospitals, as well as the regional and other tertiary health facilities, including the mother and child hospital, under construction, and the training and retraining of health personnel across the value chain.
Furthermore, in addition to promoting preventive care, we shall also endeavour to conclude action on the State’s comprehensive healthcare insurance scheme to reduce the cost burden on families and make healthcare delivery affordable and readily accessible to everyone in the State.
Against this background, we have allocated N27 billion in the 2017 capital budget to the Ministry of Health to enable us achieve our objectives for efficient and affordable healthcare delivery in Rivers State.
Enhancing Women and Youth Empowerment
Mr. Speaker, we appreciate the economic and social predicaments of our youth and the hardship they are presently passing through as a result of lack of jobs and empowerment opportunities.
As a responsive government, we recognize the need to invest in the potential of the youth and women by expanding economic opportunities to enable them participate effectively in creating wealth for themselves at the same time helping to build a stronger economy to meet our present and future development needs.
Therefore, we have, decided to implement youth and women empowerment action plan in 2017. The Ministries of Youth, Women Affairs, as well as Empowerment and Employment Generation will in due course give details of the various empower schemes to be rolled out in 2017, part of which includes the provision of Youth and Women Enterprise Development and Empowerment Fund with an initial capital of N1, 000,000,000.00.
In addition, we have allocated a cumulative sum of N12, 000,000,000.00 in the 2017 budget to the relevant line ministries to implement various youth and women development and empowerment schemes, including the building of women development centre and a football academy.
Conclusion
Mr. Speaker, in this budget, we have clearly stated the comprehensive measures we intend to employ to address the developmental challenges that we face as a people. I wish to assure Hon Members, and more important, every Rivers person that we are fully committed to actualizing our development agenda and, once again, usher in an era of peace, security and opportunity for all.
As I have stated earlier, I cannot thank you enough for the trust and call to service. The only way to reciprocate the trust and confidence is to continue to fulfill our campaign promises, which we have been doing with unwavering commitment.
No doubt, the task ahead is enormous and we surely have more work to be done here in our State. But this we promise, we have the capacity and resolve to make the next year greater for our State and our people.
We therefore continue to look forward to working together with every one of you that means well for our people in the work of rebuilding Rivers State and keeping hope alive for our people.
The 2017 budgets remains one of the basic mechanisms through which we can get the work done and return the glory to God.
Finally, Mr. Speaker, may I with your kind permission lay before this highly respected House, the 2017 Budget proposal for kind consideration and further action.
Thank you. God bless you all, God bless Rivers State.
▪BEING SPEECH DELIVERED BY HIS EXCELLENCY, NYESOM EZENWO WIKE, CON, GOVERNOR, RIVERS STATE ON THE OCCASION OF THE PRESENTATION OF THE 2017 BUDGET ESTIMATES TO THE RIVERS STATE HOUSE OF ASSEMBLY ON WEDNESDAY 28TH DECEMBER THE 2017
Source: Scannews