SPEECH BY HIS EXCELLENCY, SAMUEL ORTOM, THE EXECUTIVE GOVERNOR OF BENUE STATE, AT THE PRESENTATION OF THE 2018 “RURAL TRANSFORMATION CONSOLIDATION BUDGET ” HOLDING AT THE BENUE STATE HOUSE OF ASSEMBLY – 14TH DECEMBER, 2017.
It is with pleasure that I present to you, the Speaker, and members of the Benue State House of Assembly, the 2018 Budget Estimates, christened “Rural Transformation CONSOLIDATION BUDGET” for consideration and appropriation.
- The 2018 budget estimates that I present today for consideration and appropriation by this Honourable House is prepared based on our Blueprint, “Our Collective Vision for a New Benue”, the Ten Year Development Plan and the International Public Sector Accounting Standards to engender transparency, accountability and good governance as we move steadily in delivering the dividends of democracy to our people.
- The economy of the nation is showing signs of coming out of recession but as a State, we have continued to face economic challenges that have never been witnessed since 1999. The 2017 budget was affected by the economic recession and this impacted negatively on governance and service delivery.
- However, I remain hopeful and resolute that this difficult and challenging economic scenario will come to pass. Indeed it is almost over. We are at the door of a new economic boom. Now it is an opportunity for us to reflect on the fundamental essence of governance and the need to continue on the path of self-reliance with the resources that have been bestowed on the State.
- Mr. Speaker, and Honourable Members, since assumption of office, my administration recognised the need for us to change the narrative in order to fulfil our potentials. This recognition informed our agriculture policy that allows public servants to utilise one day in a week for food production activities. The intention was to redirect our energies and focus away from relying on Federation Account Allocation which has reduced by over 60% and for public servants and Benue indigenes to be guaranteed food security.
- We have also matched that intention with support by way of access to finance in partnership with development finance institutions like Central Bank of Nigeria (CBN), Bank of Industry (BOI) and Bank of Agriculture (BOA). But the attitude of our people towards agriculture and commercial activities need to change for us to also achieve the desired impact on the State Economy. In furtherance of this effort and to stimulate the attitudinal change, my administration entered into partnership with the Industrial Training Fund (ITF) for skills training and empowerment of over five hundred youth with business start-up kits.
- Mr. Speaker and Honourable Members, as an Agrarian State that is rightly christened as the “Food Basket of the Nation”, every effort of government must be focused at providing the enablers to attain and exceed that status. The required foundation for the State to achieve development with our comparative advantage is being laid. Industries with the capacity to provide the kind of employment required for our people are very few, commercial activities and other wealth creating opportunities are low. We were weak in infrastructure and lack policies that could protect us at a time like this.
- There are no shortcuts to economic development, adequate infrastructure and appropriate policies are required to increase commercial activities and stimulate economic growth and development. It is in this regard that I want to express my profound appreciation on behalf of the entire Benue People and indeed Nigerians for the show of leadership and courage when the need arose with the passage into law of the Benue State Open Grazing Prohibition and Establishment of Ranches Law 2017. The Law has become a model for the country. We have started implementation with provision of manpower and equipment. Worthy of mention here is also the Law for the appointment of traditional rulers which has since become operational and our traditional institution is now robust and comparable with other similar traditional institutions in the country.
Let me appreciate you Mr. Speaker and Members of the Benue State House of Assembly for your cooperation with me to usher in peace, security and good governance to the good people of Benue State.
- Accordingly, I want to appeal and encourage this Honourable House to continue on this path and together we shall overcome because of my strong belief that the protection that has been provided with the law combined with our efforts to open up the State will surely lead to the emergence of a vibrant agriculture sector with fully developed value chains in the very near future. Nigeria and the International Community is beginning to recognise this bold step as Benue has been chosen as a Pilot State for the Zero Hunger Initiative with technical support from IITA, AfDB, WFP, FAO, UNICEF and IFAD. Similar cooperation also exists with the Bill and Melinda Gates Foundation.
- These development cooperations have resulted in capacity building for over 15,500 cassava and rice farmers in Good Agricultural Practices (GAP), provision of improved breeds of goats; 3.2 metric tons of improved and certified seeds of soya bean, 6.2 metric tons of rice; 2.5 metric tons of maize as well as beniseed and cowpea per hectare; 12,519 cassava stems; supply of rice de-stoners for rice processors and 8,700 farmers have so far benefitted from the CBN Anchor Borrower’s Programme.
- On infrastructure, over 700 kilometers of highway is under construction across the State and an additional 150 rural projects comprised of 31 rural roads, 25 rural bridges and 75 electrification projects. Benue has been selected to benefit from the World Bank Rural Access and Mobility project where another 500 kilometers of rural road is expected to be constructed. When completed, the combined impact of these projects on our economy will be monumental and we would have succeeded in reducing the travel times across the State thus reducing the cost of doing business and improve the living standard of the people.
- Genuine and serious investors and developers with requisite technology and technical expertise are beginning to expedite action on their existing expressions of interest. We have now nearly concluded arrangements with the Nigerian National Petroleum Corporation (NNPC) for the establishment of the Biofuel Project at Agasha, Guma Local Government Area. This Project is expected to create over one million jobs with an initial investment in excess of One Hundred Billion Naira (N100,000,000,000.00). Similarly, the partnership for the establishment of 600,000 metric tons per annum cement factory at Igumale, Ado Local Government Area is at an advanced stage and the final batch of equipment were inspected during my last visit to China. But if the core investor fails to deliver the equipment by the end of this year we may be compelled to revisit the agreement on the factory. HEPC Global, a Netherland based company is partnering with the State Government in an Agro-Allied investment of €750 Million on a 40,000 hectares of land between Gwer West and Agatu Local Government Areas and will employ about one thousand people. Other existing non-performing government owned industries and commercial investments are being processed for privatisation.
- The House of Assembly will recall the approval granted to the State to participate in the Fiscal Sustainability Plan introduced by the Federal Government in 2016. We have continued with the implementation of the Plan with expectation of improvement in management of our resources and other associated benefits like closer collaboration and support from Development Partners. Going by our present pace, the 22 points Plan will be fully implemented by the end 2018.
- Similarly, we are also fully participating in the Social Investment Programme introduced by the Federal Government with substantial benefit to our people. The National Social Investments Programme is a flagship social intervention programme of the Federal Government of Nigeria targeting the poorest and most vulnerable population in the country and was launched in
August, 2015. The programme seeks to create a social safety net to lift as many people as possible above the poverty mark. Consequently, we are participating in the following programmes;
- The Conditional Cash Transfer Programme,CCT
- The Government Enterprise and Empowerment Programme,GEEP
- The NPOWER Programme
- The Home Grown School Feeding Programme.
15.0 Mr. Speaker, please permit to provide more insight on our participation in these programmes because of the importance to the State.
- THE CONDITIONAL CASH TRANSFER PROGRAMME
15.1 Under this Programme, the Federal Government seeks to provide direct cash of N5, 000 to 210 of the poorest and the most vulnerable persons in every council ward in Nigeria through a community based targeting approach. Thirty per cent of the Local government areas across Nigeria have been identified and selected for the first phase of the programme using the World Bank’s Poverty Ranking conducted in 2014 via a United Nations poverty index survey. In Benue State, 9 LGA’s have been selected to benefit from the pilot implementation of the programme, three per Senatorial district;
- Zone A – Ushongo, Vandeikya and Konshisha
- Zone B – Buruku, Guma and Gwer West
- Zone C – Ado, Ogbadibo and Oju
15.2 These LGA’s have since constituted community based targeting teams and have completed work on the identification of Poor and vulnerable households (PVHH) in the selected LGA’s. So far 13,888 persons have been identified through this targeting approach and have been uploaded on the National Social Register. Benue State is amongst the first 17 States selected for implementation of the programme and direct cash transfer is expected to commence before the end of the year.
- GOVERNMENT ENTERPRISE AND EMPOWERMENT PROGRAMME (GEEP – MARKET MONI)
15.3 The Government Enterprise and Empowerment Programme, GEEP or Market Moni as is popularly called is designed to provide small loans to market men and women engaged in petty trading and seeks to bridge a credit gap on the lowest arm of the open market space. Market Moni loans are collateral free and have a repayment period of six months in the first instance and three years subsequently for those whose loans will be ungraded from N50, 000 to N250, 000. The only requirement is membership of either a Rural Cooperative or Market Association with interest free loans of N50,000 each available to 30,000 beneficiaries in Benue State and aggregate value of about 1.5 Billion Naira.
15.4 The N-power Programme is a Youth Empowerment Programme designed to create 500,000 direct new jobs to persons between the ages of 18 and 35. These jobs span through the specific areas of Health, Education, Agriculture, Commerce and Technology with 350,000 of these jobs captured specifically under the titles of;
- N-Teach – for those trained and posted as volunteers to provide support in public primary schools as teachers or trainee teachers and community service educators within the LGA
- N-Agro – for those trained and posted to the agric development centers to provide extension services to our famers, and
- N-Health – for those posted to assist at primary health care centers within the Local government health establishments.
- N-Build is a technology based arm of the programme and seeks to recruit and train unskilled manpower for the construction industry.
15.5 Benue State placed fourth nationally with an initial enrolment of 9,740 beneficiaries. Successful participants in this programme have since been trained and posted to their places of primary assignment where they are presently rendering support services and are being paid N30,000.00 monthly bringing total pay out for this programme in Benue to about two hundred and nine-two million, two hundred thousand naira (N292,200,000.00) per month. Each of these volunteers have also only recently, been presented with a computer device to serve as teaching aid in their various areas of support. The second phase of this programme is about to be launched in the next few weeks and will provide an additional 150,000 jobs across the country. The applications from Benue so far stand at over 34,000 and places us number two, nationally.
- HOME GROWN SCHOOL FEEDING PROGRAMME
15.6 Under this programme, the Federal Government is targeting to feed about 5.5 million pupils in public primary schools across the country and Benue State is billed to provide about 250,000 of this beneficiary base. However, we have doubled this number so far. Benue was amongst the first 13 States in implementation, having met all the co-responsibility commitments as prescribed by the Federal Government. The programme was flagged off on the 3rd of July, 2017 in Benue State with 3,865 Food Vendors across the 23 LGAs of the state to feed 447,215 as against the initial 240,827 pupils fed in the first and second tranches of disbursement by the National Home Grown School Feeding, Office of the Vice President, Federal Republic of Nigeria Abuja.
PERFORMANCE OF THE APPROVED 2017 BUDGET
- Mr. Speaker, Honourable Members, you will recall that the approved 2017 budget was prepared based on “Our Collective Vision for a New Benue” and the Benue State Development Plan with a pro rated aggregate revenue of One Hundred and Eighty-three Billion, Three Hundred and Sixty-eight Million, Seven Hundred and Eighty Thousand, Four Hundred and Ninety-nine Naira (N183,368,780,499.00) only. This was based on budget assumptions of $42.50 benchmark oil price and daily production estimate of 2.2 million barrels per day as established by the Federal Government. Out of this amount, a total sum of Seventy-Three Billion, Three Hundred and Ninety Million, Five Hundred and Thirty-three Thousand and Ninety-seven Naira (N73, 390,533,097.00) only was appropriated for recurrent expenditure representing 40.02% while One Hundred and Nine Billion, Nine Hundred and Seventy-eight Million, Two Hundred and Forty-seven Thousand, Four Hundred and Two Naira (N109, 978,247,402.00) only was appropriated for capital expenditure representing 59.98%. As you will observe in the details, the total sum of Fifty-nine Billion, Nine Hundred and Twenty Million, Thirty-eight Thousand, Two Hundred and Fifty-five Naira, Eighty-nine Kobo (N59, 920,038,255.89) only accrued to the State from all revenue sources as at October, 2017. This represents 32.68% of the approved revenue for the year and it is lower than the projected recurrent expenditure by 7.34%.
- A further breakdown of this inflow showed that Twenty-two Billion, Two Hundred and Thirty-two Million, Five Hundred and Seventy-three Thousand, Three Hundred and Fifty-seven Naira, Fifty-five Kobo (N22,232,573,357.55) only was realised as gross statutory allocation. This figure represents 42.11% and it is less than half of the projected Fifty-two Billion, Eight Hundred Million naira (N52,800,000,000.00) only approved in the 2017 budget as revenue from this source, thus indicating a below average performance for the approved 2017 budget. This low budget performance could also be seen in all the other revenue sources except VAT which recorded a slightly better performance with an inflow of Eight Billion, Forty-three Million, Three Hundred and Seventy-seven Thousand, Six Hundred and Ninety-three naira Eighty-eight kobo (N8,043,377,693.88) or 70.65% of the budgeted sum. The shortfalls translated into the inability of government to meet statutory obligations within the period under review.
- There was a provision for deficit financing of Thirty-five Billion (N35,000,000,000.00) in the approved 2017 budget however, only Six Billion, Ninety-nine Million, Two Hundred and Ninety-six Thousand, Five Hundred and Seven naira, Thirteen kobo (N6,099,296,507.13) was accessed during the period.
- Mr. Speaker, as stated earlier, the total expenditure projection for the 2017 budget was One Hundred and Eighty-three Billion, Three Hundred and Sixty-eight Million, Seven Hundred and Eighty Thousand, Four Hundred and Ninety-nine naira (N183,368,780,499.00) only which was allocated as follows:-
|A. RECURRENT EXPENDITURE N73,390,533,097.00|
|B. CAPITAL EXPENDITURE N109,978,247,402.00|
20.0 The implementation of the 2017 budget was greatly impacted by the continued recession in the country. Out of the above figure, the total recurrent expenditure as at October, 2017 was Thirty-Five Billion, Twenty-eight Million, Nine Hundred and Thirty Thousand, Nine Hundred and Eighty-three naira, Fifty-one kobo (N35, 028,930,983.51) only. While the sum of Eight Billion, One Hundred and Thirty-eight Million, Ninety-three Thousand, Nine Hundred and Eighty naira Eighty kobo (N8,138,093,980.80) only was expended on capital development and Seven Billion, One Hundred and Fifty-four Million, Seven Hundred and Sixty-seven Thousand, Nine Hundred and Seventeen naira Sixty-six kobo (N7,154,767,917.66) only was spent on debt service within the period. We also realized N5.9 billion as Internally Generated Revenue during the time.
- Mr. Speaker, Honourable Members, although the approved 2017 budget made adequate provisions for the needs of the State, developments during the year has created the need for a supplementary budget. Accordingly, I have laid before the Honourable House, a supplementary request of Two Billion, Three Hundred and Twenty-nine Million, Six Hundred and Seventeen Thousand, Three Hundred and Eighty-nine Naira (N2,329,617,389.00) only for consideration and appropriation. The provision for this supplementary expenditure has been sourced from items in the approved 2017 budget, which we have carefully examined and concluded but cannot be executed in 2017 considering the time left and no process has yet commenced for utilisation of these provisions. Hence, the 2017 Budget aggregate expenditure will remain the same at the sum of One Hundred and Eighty-three Billion, Three Hundred and Sixty-eight Million, Seven Hundred and Eighty Thousand, Four Hundred and Ninety-nine naira (N183, 368,780,499.00) only.
22.0 We have continued to apply prudence to the utilisation of scarce funds within the year for provision of security for life and property, infrastructure while at same time meeting our debt obligations. We were however not able to clear outstanding salaries, gratuity and pensions due mainly to the drastic shortfall in revenue and the over bloated average monthly wage bill of N7.8b.
THE PROPOSED FISCAL YEAR 2018 BUDGET ESTIMATES
23.0 The proposed fiscal year 2018 Budget Estimate is driven by the desire of this administration to continue to provide security for life and property and create enabling business environment for businesses to thrive, sustain and consolidate rural transformation for improvement in our competitiveness and deepen agricultural production using the value chain concept in line with the blueprint, “Our Collective Vision for a New Benue” and the Ten Year Development Plan. Furthermore, Government shall ensure the implementation of programmes and policies that will improve the overall welfare and capacity of the public service within available resources while at the same time strengthening appropriate institutions for quality education and health service deliveries and provide social interventions for the vulnerable in our society. At least three science and technical schools will be established to train appropriate human resource. We will continue our efforts to provide rural access road and electrification while water supply and sanitation will also be prioritised. The on-going renovation of primary schools will be sustained and extended to cover more schools. The health sector will be given special attention especially at the primary health level. Every effort will be made to recruit more of our youths and women in the agriculture sector to promote the agriculture as business. Access to credit will be improved to support self-employment in agriculture. By January, 2018, we expect new efficiency in payment of salaries, gratuities and pensions as the Abounu-led committee must have completed work and the implementation of the reduction of the monthly wage bill from N7.8 billion to N4.5 billion will have commenced. The support of the House of Assembly in this direction will also be appreciated. We also expect our local governments to be ready to operate efficiently to add value to good governance in the state.
- Mr. Speaker, Honourable Members, our reforms in the civil service are on course with the expectation for a robust and well trained civil service at the end of the exercise. Similar reform is also on-going in land administration to improve on tax. In this regard, we have given tax holiday to allow citizens secure their certificates of occupancy. We will continue to support law enforcement agencies to ensure peace, law and order. Our youth and indeed other citizens will be encourage to engage in agriculture as a business with incentives like provision inputs and credit facility at concessionary interest rates.
ASSUMPTIONS OF THE PROPOSED 2018 BUDGET ESTIMATES
- Mr. Speaker, Honourable Members, the 2018 Budget Estimate is based on the assumption that:
- the revenue sharing formula would improve with respect to the Statutory Allocation and Value Added Tax (VAT)
- there would be continued institutional strengthening of internally generated revenue collection in the State in collaboration with the Local Government Councils
- there would be a total blockage of all leakages in internal revenue generation by MDAs and remitting of same into Government Treasury Single Account
- there would be continuation of the financial management reforms embarked upon with the implementation of the Fiscal Sustainability Plan
- the political and economic climate of Nigeria and particularly of Benue State shall remain stable during fiscal year 2018
- the exchange rate of the naira ($305.00) will also remain stable and the benchmark of oil price ($45.00) as proposed by the Federal Government is attained and sustained
- Herdsmen and Farmers and other communal clashes are eliminated.
2018 BUDGET REVENUE ESTIMATES
- After noting the above assumptions and taking into consideration, the 2017 revenue performance, a total sum of One Hundred and Seventy-eight Billion, Three Hundred and Seventy-seven Million, Eight Hundred and Eleven Thousand, Six Hundred and Eight Naira (N178, 377,811,608.00) only is now proposed for approval as estimated aggregate revenue from all sources in fiscal year 2018. Although we were only able to realise 32.68% of the total approved revenue for 2017 as at September, 2017, we have proposed this figure for 2018 bearing in mind the compelling need to make adequate provisions for the productive sector of the economy, consolidate the on-going rural transformation and the following underling considerations:-
- i) the relative peace in the Niger Delta coupled with the stability in the price of crude oil and the exchange rate of the naira are expected to have positive impact on our accruals from Federation Account
- ii) we have introduced key reforms in our financial management and currently, the Fiscal Sustainability Plan is being implemented with in-built mechanism for improvement in revenue generation and improvements in prudent management of resources
iii) we have renewed our commitment with our development partners and expect a robust relationship within the year 2018
- iv) we are also consolidating our accounting systems with the sustained implementation of the International Public Sector Accounting Standards (IPSAS)
- v) Revenue from PAYE is expected to rise because of the robust mechanism being put in place for collection
With the above objectives, assumptions and expectations, the inflow from the various sources of revenue for the proposed 2018 budget estimate is as follows:-
Table II: Proposed Fiscal Year 2018 Budget Revenue Estimates
|SOURCE OF REVENUE||AMOUNT (N)|
|State Statutory Allocation||46,998,550,000.00|
|Value Added Tax (VAT)||10,000,000,000.00|
|Excess Crude Oil||2,000,000,000.00|
|Foreign Exchange Gain||4,790,380,807.00|
|Pay As You Earn (PAYE) Commercial||5,299,291,750.00|
|Revenue from Institutions and Boards||13,648,587,083.00|
|Domestic Aid and Grants||11,906,600,000.00|
|Foreign Aid and Grants||9,713,357,765.00|
|Domestic/Foreign Loans/Deficit Financing||40,000,000,000.00|
|Extra Ordinary Items||786,058,000.00|
2018 BUDGET EXPENDITURE PROJECTION
- The proposed aggregate expenditure of Benue State Government in fiscal year 2018 is One Hundred and Seventy-eight Billion, Three Hundred and Seventy-seven Million, Eight Hundred and Eleven Thousand, Six Hundred and Eight Naira (N178,377,811,608.00) only.
- From this figure, a total sum of Seventy-seven Billion, Seven Hundred and Sixty-one Million, Seventy-two Thousand, and Six Hundred and Sixteen Naira (N77,761,072,616.00) only is projected as recurrent expenditure in 2018 representing 44%. Out of this figure, Fifty-one Billion, fifteen Million, Two Hundred and Fifty-seven Thousand, Twenty-six naira (N51,015,257,026.00) is projected as personnel expenditure representing 29% while Twenty-six Billion, Seven Hundred and Forty-five Million, Eight Hundred and Fifteen Thousand, Five Hundred and Ninety-one naira (N26,305,815,591.00) representing 15% is for overhead expenditure.
- The capital expenditure for fiscal year 2018 is One Hundred Billion, Six Hundred and sixteen Million, Seven Hundred and Thirty-eight Thousand, Nine Hundred and Ninety-one naira (N100,616,738,991.00.00) only representing 56% of the total expenditure.
2018 BUDGET ESTIMATES SECTORAL ALLOCATION
- Mr. Speaker, Honourable Members, we are proposing for this year an allocation of Twenty-five Billion, Two Hundred and Twenty-eight Million, Two Hundred and Forty-six Thousand, Nine Hundred and Seventy-eight Naira (N25,228,246,978.00) only representing 14.14% to administration while the economic, Law and Justice and Social Sectors are allocated Eighty-seven Billion, Five Hundred and Eighty-seven Million, Four Hundred and Ninety Thousand, Two Hundred and Ninety-two Naira (N87,587,490,292.00) only representing 49.10%; Three Billion, Three Hundred and Eighty-seven Million, Nine Hundred and Twenty-seven Naira (N3,387,187,927.00) representing 1.90% and Sixty-two Billion, One Hundred and Seventy-four Million, Eight Hundred and Eighty-six Thousand, Four Hundred and Eleven Naira (N62,174,886,411.00) only representing 34.86% respectively.
THE CHALLENGES OF FISCAL YEAR 2018 BUDGET
- The following are the anticipated challenges of the 2018 Budget.
- a) ensuring adequate revenue inflows in the face of dwindling federation account receipts to fund the budget
- b) sustainable payment of wages to all legitimate categories of public servants and pensioners
- c) payment of cost of running government
- d) funding of all capital projects and meeting Government contractual obligations
- e) payments of all outstanding debts
- f) cost of controlling unexpected herdsmen and communal crises.
- In-order to mitigate these challenges, a Strategy Committee on Revenue, Development Cooperation and Agriculture value chains to be Chaired by His Excellency, the Executive Governor and to hold meeting monthly will be institutionalised beginning January, 2018 to address policy issues regarding generation and remittance of revenue, agriculture value chain and development cooperation in the State. Similarly, because of the fact that the revenue estimates were submitted by MDAs based on their capacities, adequate support and compliance measures shall be put in place beginning January, 2018 to track and ensure remittance of all collected revenues in line with agreed milestones and sanctions will be applied where appropriate. Also, all existing consultancy and service contract for revenue generation will be reviewed with the aim to ensure value for money.
- Mr. Speaker, Honourable Members, I believe that the task of developing the State is collective and I will continue to act and promote cordial relationship between all the arms of government for the State to achieve development. I therefore seek the continued cooperation and support of the Benue State House of Assembly in making development possible for our people.
- It is on this note that I now place before the Honourable House, the Benue State Government Budget Estimates for fiscal year 2018 with an aggregate expenditure projection of One Hundred and Seventy-eight Billion, Three Hundred and Seventy-seven Million, Eight Hundred and Eleven Thousand, Six Hundred and Eight Naira (N178, 377,811,608.00) only to the Glory of God Almighty and benefit of our people.
- Thank you for your attention.
- In God we trust.