Protocols
It
is my pleasure to present to this Honourable Assembly the Budget of our
administration for the 2016 fiscal year.
2.
Mr. Speaker, recall that we inherited a State that was stuck in social and
economic problems and practically dysfunctional. However, we immediately set
out to fix the State and deliver on our promises in line with our mission and
vision for a new Rivers State within the framework of the 2015 budget.
3.
In the past six months we have tackled the myriads of challenges head on and
made significant progress on all fronts. For example, we have cleared the
backlog of salary arrears owed to civil servants and pensioners without any
bailout from the Federal Government. We have reconstructed several roads in
Port Harcourt through the operation zero pothole programme. We remobilized
contractors to continue with the construction of several major roads abandoned
by the previous government. Today, we are happy to report the completion of some
of these roads while others have reached advanced stages of completion.
4.
The Faculty of Law complex we recently completed at the Rivers State University
of Science and Technology is ranked as the best in West Africa. Our law
students are today learning in a very conducive faculty building. Besides this,
we have kick-started our secondary schools rehabilitation programme. The first
phase of this programme is expected to deliver eleven first generation schools
across the three senatorial districts.
5.
Arguably, we are making progress and things are getting better for our State.
Indeed, but for the low finances, we would have registered greater
achievements. Nonetheless, we are satisfied with our efforts so far. We have
started well. Yes, we are on track to deliver on our mandate and realize God’s
promise for a peaceful, secure and prosperous Rivers State.
6.
So, today, we are here to consolidate on our gains and take Rivers State to the
next level with the 2016 budget estimates within the framework of effective
mobilization and allocation of public resources to priority sectors of our
development needs. , such as road infrastructure, security, healthcare,
education, agriculture and youth empowerment.
THE 2016 ECONOMIC
OUTLOOK OF RIVERS STATE
7.
Mr. Speaker, we are all aware of the poor state of Nigeria’s economy. Rivers
State, like every other State of the federation, still depends on federal
allocation for most of its development revenues. We are therefore going to be
affected by the shocks generated by the drastic fall in revenue accruable to
the Federation Account and the macroeconomic distortions of the degraded naira
and corresponding inflationary pressures.
8.
While we appreciate the efforts and measures taken by the Federal Government to
improve the nation’s economy, it is obvious that concrete progress will take
beyond 2016 to manifest. This means that we must be realistic in our
expectations about the State’s economic outlook, even as we try to be
cautiously optimistic.
9.
Against the background of gloomy economic outlook therefore, we have decided to
fix the base line of our 2016 budget projections on an oil price of 35 USD per
barrel as against the 38 USD price fixed by the Federal Government. This leaves
us with some difference and comfort zone of 3 USD con8 thereby leaving it may
be difficult for us to find sufficient resources to o meet our revenue
projections for 2016, even as the baseline is anchored on an oil price of 35
USD per barrel with a comfort zone of not less than 3 USD.
10.
Reflecting and guided by this situation, we intend to be as realistic as
possible with our revenue projections for 2016. Basically, we intend to
introduce necessary reforms to boaster internally generated revenue (IGR) by
blocking leakages and expanding the State’s revenue base to the informal
sectors of our economy. Furthermore, we also intend to make provisions for a
buffer fund from loans and grants from our development partners to fund
possible deficits and distortions on our development agenda. However, because
this is a fallback measure, we would draw down on such facility only when it
becomes economically expedient to do so.
REVIEW OF THE 2015
BUDGET
11.
Mr. speaker, Hon members, it may be appropriate at this juncture to review the
2015 budget estimate to enable us more effectively contemplate the 2016 budget
estimate with the revenue component.
12.
We had approved total revenue of N338, 768,000,000 for 2015, made up of FAAC revenue receipt of
N220, 920,000.00, Internally Generated Revenue (IGR) of N98, 228,000,000.00 and
other revenue receipts of N19, 620,000,000.00.
13.
Out of this sum total receipts as at September 2015 stood at N94, 581,602,043
representing 43.86% of the actual receipt on total appropriation and 21.72% on
actual receipt on the total appropriation for the year 2015.
14.
Similarly, out of the approved capital FAAC of N220, 920,000,000, only N94,
173,958,240 representing 56.14% of the approved FAAC and 24.55% of the total
revenue estimate was realized in the course of the year. Furthermore, the total
recurrent expenditure as approved for 2015 stood at 119,453,030,710 with actual
expenditure of N85, 842,712,665 representing 25.34% of the approved sum for the
2015.
15.
Further breakdown shows that salaries had N60, 973,112,996, which represented
51.04% of total recurrent expenditure while the overhead expenditure had N24,
206,996,358 representing 20.26% of the total recurrent expenditure for 2015,
with the actual release of N3, 853,275,679 representing 1.13% of the actual
overhead release as compared to the total appropriation for 2015.
Other
items had N34, 272,951,356 with actual expenditure standing at N21, 019,682,284
representing 6.20% of the actual in terms of the total expenditure for 2015.
16.
Also, a total of N219, 314,969,290, was approved for capital expenditure for
2015 with actual expenditure of N127, 535,902,006 representing 37.65% of the
actual expenditure on the total capital appropriation for 2015. Further
analysis revealed that N29, 240,775,000 was approved for the administrative
sector with actual release put at N34, 466,919,707 representing 10.17% for the
year 2015.
17.
A total of N73, 808,694,480 was proposed for the Economic sector with actual
expenditure of N32, 822,514,307 representing 9.69%. Law and Justice had N770,
000,000 proposed for 2015 while only N1, 588,000,000 representing a 0.47%
increase above the approved sum was expended.
The Social sector had N38, 197,500,000 with an actual release of N11,
535,633,503 representing 3.41% for the year 2015. The Special Heads had N77,
294,999,810 with actual expenditure standing at N5, 168, 143, 029 representing 1.53%
while others had as approved N48, 423, 413, 785 with the actual expenditure of
N419, 546, 913.18 representing 12.38%.
18. Mr. Speaker, the 2015 budget performed far
below projections. While the downward fall of the economy was the major factor
responsible for the poor performance, a secondary factor was the near total
failure of the previous administration to implement the budget as passed.
Rather, available funds were diverted to political and other unproductive ends.
Having lost five months, the implementation of the 2015 budget actually stared
when we came in with our development agenda.
19.
In the course of the year a further sum of N104, 287,285,108.00 was approved as
supplementary budget, bringing the total appropriation for 2015 to N443,
055,285,108.00
THE 2016 BUDGET
ESTIMATES
20.
Mr. Speaker, in 2016, we are proposing a budget of consolidation. The policy
thrust is to strengthen the foundation, consolidate the gains already achieved
and take Rivers State to the next level of development. To this end, the 2016
budget shall be tailored to meet the following policy goals:
Effective mobilization, equitable allocation
and prudent management of public finances;
Building a modern, productive, diversified and
competitive economy to create jobs and empower our people;
Completing all ongoing basic infrastructure
projects and initiating new ones, where necessary; and
Delivering more and better public services
with little resources
21.
Mr. Speaker, because we have already taken off, what we shall do throughout
2016 is to continue on the fast lane to complete all ongoing roads and other
projects, initiate and build new roads and other development projects, enhance
our security system to make Rivers State safe and secure, diversify our economy
through agriculture and industrialization and invest in the future of our youth
through human capital development and job creation.
22.
However, while our transformation agenda and commitment remains constant, we
have taken the state of the economy into account in our revenue projections.
Accordingly, we are constrained to keep our projections within realistic
limits. To this end, we propose a Budget Estimate of N307, 000,000,000.00
(three hundred and seven billion naira) only, for the 2016 financial year.
Funding of the
2016 Budget
23
We expect the 2016 budget to be funded from the traditional sources, including
Statutory Allocation from the Federation Account, Derivation proceeds, Value
Added Tax (VAT) and IGR. We are projecting N115, 000,000,000.00 (one hundred
and fifteen billion naira) from the Federal Accounts Allocation (FAAC)
including derivation and VAT. We also expect to generate N120, 000,000,000.00
(one hundred and twenty billion) from IGR; while N72, 000,000,000.000
(Seventy-two billion naira) will come from other sources.
24.
Our ambitious revenue target from IGR is underpinned by necessary changes we
will introduce to improve the administration of tax. The State Internal Revenue
Board has been mandated to implement measures to expand the State’s revenue
base, block tax leakages and improve revenue collection.
25.
It is also pertinent to note that part of the development budget will be funded
with projects specific loans from our domestic and external development
partners.
Recurrent
Expenditure
26.
The breakdown of the budget shows that a total of N120, 000,000,000 (one
hundred and twenty billion) is proposed for recurrent expenditure. Out of which
the sum of N55, 000,000,000.00 is earmarked for salaries, N18, 114,178,637.00
for the payment of pensions and gratuities, while overhead costs is expected to
gulp N14, 524,179,815.00.
Capital
Expenditure
27.
The total projected capital expenditure for 2016 is N187, 000,000.00 (one
hundred and eighty-seven billion naira), which gives a capital to recurrent
expenditure ratio of 60:40. In terms of sectoral allocation, the figure shows
that 15.5 per cent or N29, 042,275,000.00 is allocated to the administrative
sector; 29.1 per cent tor N76, 326,194,480.00 is allocated to the economic
sector, 0.41 per cent or N770, 000,000.00 is allocated to the Law and Justice
sector; and 28.4 per cent or N53, 207,500,000.00 is allocated to the social
sector.
28.
The reasonable increase in the capital expenditure is in furtherance of our
priority to progressively shift more resources from recurrent purposes to
development expenditure in line with our abiding determination to promote
economic growth and diversification, human capital development, the provision
of physical infrastructure and improving the well being of our people.
29.
Mr. Speaker, we recognize the enormous developmental challenges facing the
State, including the high poverty and unemployment rate, low agricultural and
industrial productivity, inadequate social and economic infrastructure,
large-scale fiscal inefficiencies and growing insecurity. However, we are
totally committed to tackling these challenges, restoring hope and securing a
better future for our children and grandchildren.
30.
Therefore, we will through the 2016 budget continue to address the critical
sectors of our development plan for the State. Accordingly, the 2016 budget is
intended to prioritize security, infrastructure provision, education,
healthcare, energy security and socio-economic empowerment.
31.
We need to secure our State and make it safe for our people and investors in
order to achieve our economic and development objectives of generating more
revenue, creating quality jobs and enhancing peoples’ living standards. The rising incidents of kidnapping and other
violent crimes across the State and the general sense of insecurity across the
nation impels the need for us to more decisive in tackling insecurity and
criminality. To counter the security challenges, the Government is committed to
significantly increasing resources to support the capacity of the security
agencies in the areas of logistics, intelligence gathering, quick response and
motivation. Accordingly, we have provided N15 billion naira to the security
sub-sector in the budget.
Provision of
infrastructure
32.
As we all know the provision of transport infrastructure is critical to the
socio-economic advancement of any nation. Accordingly, in 2016 we intend to
complete all on-going road projects and kick-start the construction of the
Trans-Kalabari road network, the dualization of Ahoada – Omoku road as well as
Bori Sapkenwa road. We shall also
continue with the construction of inner city roads in Port Harcourt, Obio/Akpor
and the headquarters of other local government areas. Accordingly, over 53 billion naira is
provided for the infrastructure development sub-sector.
33.
Furthermore, given the scarcity of public resources and the huge gap in the
State’s infrastructure needs, we will use the public private partnership
arrangement to mobilize private sector resource for infrastructure development,
especially in the areas of roads construction, power generation, education, healthcare
and other viable projects.
Development of
Agriculture
34.
We continue to appreciate the strategic role of agricultural productivity for
achieving the transformation of our economy. We shall therefore continue to
invest reasonable resources and efforts toward enhancing agriculture and its
value chain. Furthermore, we shall continue to encourage and support our youth
with land, capital and capacity to take to agri-business as a profitable
commercial venture to reduce unemployment and poverty.
Provision
of quality education
35.
As a State we have made tremendous progress on access to education at all
levels. However, a lot still needs to be done on the quality and relevance of
education, especially given how young school-leavers are finding it difficult
to find jobs. We are therefore scaling up resources to enhance the quality of
our education at all levels. We will give priority attention to vocational and
entrepreneurial education to provide life-long skills and interest in small
businesses for our youth, women and persons with disability to be gainfully
employed and self-sustaining.
36.
Furthermore, we intend to complete the rehabilitation of more secondary schools
and pilot the re-introduction of boarding facilities in public secondary
education. We also intend to ensure the formal upgrading of the Rivers State
College of Arts and Science to a polytechnic status as well as ensure the
takeoff of the Faculty of medical sciences in the Rivers State University of
Science and Technology.
Provision of
Healthcare
37.
In the same vein we intend improve the healthcare delivery system in the State
with a view to drastically reducing infant and maternal mortality, promoting
healthy life-styles, providing social safety nets for vulnerable people, and
building a healthy and productive population for sustained economic growth. To
this end, we have concluded arrangements to upgrade healthcare centres
throughout the State with state of the art infrastructure, facilities and
equipment. We also intend to provide special interventions for the training and
re-training of doctors, clinical officers and nurses’ internship, and the
elimination of malaria and control of HIV/AIDs
Economic
Empowerment.
38.
We believe that inclusive growth is only possible with the empowerment of our people
to participate and take commanding heights in State and nation’s economic
opportunities on offer. To achieve this goal, we will continue with
implementing viable measures to support and improve the capacity of Rivers men
and women to engage in viable business activities. Part of the measures is to
ensure that Rivers people are accorded priority consideration in the award of
government contracts.
39.
Furthermore, apart from improving the environment for SMEs to flourish, we
shall ensure that companies handling major government funded projects concede
all sub-contracts to indigenous contractors.
40.
In conclusion, I wish to reiterate the fact that while we are seriously
committed, our capacity to deliver on our promises is constrained largely by
inadequate resources. However, we remain undaunted and will not be overwhelmed
by the challenges.
41.
The 2016 budgets remains one of the basic mechanisms we intend to effectively
utilize to consolidate on our agenda for moving Rivers State forward. All that
we ask for is your patience, continuous understanding and cooperation. We are
not here to fail and we shall not fail to deliver the dividends of democracy to
our people.
42.
Before I lay the 2016 proposals before this Honourable House, let me on behalf
of the people of Rivers State express my sincere appreciation to Mr. Speaker
and Distinguished members for their relentless support towards our
administration from the beginning to this moment. We count that this wonderful
partnership between us will continue to work harder in 2016 to deliver for the
people of Rivers State.
43.
Finally, Mr. Speaker, may I with your kind permission lay before this highly
respect Houser, the 2016 Budget proposal for consideration and passage into
law.
44.
Thank you all and may God continue to bless Rivers State.
His
Excellency, Chief Nyesom Ezenwo Wike, CON
Governor
of Rivers State
Friday,
December 18, 2015
