2018 Budget Speech
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. Protocols 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.
- 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
- The Conditional Cash Transfer Programme,CCT
- The Government Enterprise and Empowerment Programme,GEEP
- The NPOWER Programme
- The Home Grown School Feeding Programme.
- THE CONDITIONAL CASH TRANSFER PROGRAMME
- Zone A – Ushongo, Vandeikya and Konshisha
- Zone B – Buruku, Guma and Gwer West
- Zone C – Ado, Ogbadibo and Oju
- GOVERNMENT ENTERPRISE AND EMPOWERMENT PROGRAMME (GEEP – MARKET MONI)
- 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.
- HOME GROWN SCHOOL FEEDING PROGRAMME
- 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|
- 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.
- 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.
- 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.
- 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
- 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
|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|
- 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.
- 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 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.