ADDRESS BY HIS EXCELLENCY, SENATOR, DR. IFEANYI ARTHUR OKOWA, GOVERNOR OF DELTA STATE, ON THE OCCASION OF THE PRESENTATION OF THE 2016 BUDGET PROPOSALS TO THE DELTA STATE HOUSE OF ASSEMBLY ON TUESDAY, 8TH DECEMBER, 2015
Mr Speaker,
Honourable Members
I present this Budget today in an economic environment of anxiety and uncertainty amidst expectations for quick results, faster development and the highest levels of discipline, honesty and transparency in government.
2. My proposals provide the roadmap for revitalising the economy, maintaining strict fiscal discipline, creating wealth, promoting employment, encouraging self-reliance, and developing a knowledge-based economy.
3. It also contains guidelines to enhance our competitiveness in areas where we are strong and facilitate the development of our State, foster a clean, efficient and dedicated civil service, support social enterprises, promote investment, stimulate economic growth, and articulate the strategies for passing on the benefit of this growth
to the common man, woman, youth and child whose quality of life desperately needs to be enhanced. To these aspirations we are totally and irrevocably committed, and we will do everything within our power as a government to actualise them.
4. Though the Budget is essentially a Statement of Account of public finances, it has historically become a significant opportunity for the government of the day to present a report card of its performance. On May 29 when I assumed office, Delta State was beset with severe financial challenges. Accruals from the Federation Account had dipped drastically, the State was burdened with a huge debt profile, and the deficit threatened our capacity to deliver on our S.M.A.R.T agenda as well as the Government’s ability to meet its statutory obligations to workers and contractors.
5. Nevertheless, we remained hopeful and confident that with discipline, prudent management of public finances, common sense
planning and the can-do spirit of our people, we would overcome this challenge and see our economy come out stronger, better and more resilient. To eliminate the deficit and restore the health of our public finances, we took the following steps:
- Downsized the 2015 budget as approved to bring it in line with the prevailing economic realities in the country,
- Embarked on cost cutting measures to plug wastage and leakages,
- Ensured expenditure was kept within revenue limits,
- Emphasised judicious use of available resources,
- Reduced operating expenditure,
- Made political appointments in a staggered manner, to reduce the impact on the State’s finances,
- Set up a Verification Team to scrutinize the contractual debt profile of the State, ascertain the veracity of outstanding liabilities, and confirm if the contracts were satisfactorily executed, and
- Prioritized our programmes, and the funding of on-going projects/programmes based on their economic/social value.
6. Due to the combined efforts of all – the civil service, the political class and sundry stakeholder groups – I am happy to report that we have been able to achieve substantial level of fiscal stability, thus creating the right conditions for economic prosperity and achieving sustainable development. My gratitude goes to all Deltans for their patience and continued support for this administration in the face of some tough decisions that we have had to take.
7. I also thank this honourable House for its cooperation and support in the past six months, obviously a trying time in which we made far-reaching sacrifices and denied ourselves some entitlements. This sense of mission and unity of purpose are what we need to engender long-term economic development, social harmony, political stability, and general well-being of our people. My sincere appreciation also goes to the Civil Service Establishment, the Nigerian Labour Congress, Trade Union Congress and all workers’ unions and associations for their understanding and support.
8. Mr Speaker, our achievements have not been restricted to the fiscal management of the economy. Permit me to highlight three key
areas of achievement as they demonstrate the import of our S.M.A.R.T agenda.
Creating Wealth, Nurturing Entrepreneurs
9. Job and wealth creation is the focal point of the S.M.A.R.T Agenda, and the crucial point of reference on which this administration will be judged both now and in the future. The core principle of the Job and Wealth Creation Scheme is to put resources (skills, tools and complementary services) in the hands of disadvantaged people – unemployed graduates, secondary school leavers, farmers, artisans - and empower them to move from welfare to self-employment, and also give them employability skills.
10. The existing job and wealth creation programmes include:
1. Youth Agricultural Entrepreneurs Programme (YAGEP)
2. Skills Training and Entrepreneurship Programme (STEP)
3. Production and Processing Support Programme (PPSP)
4. Microcredit (administered by the Delta State Micro, Small and Medium Enterprise Development Agency).
11. There are two hundred and fifty six (256) YAGEP trainees currently undergoing internship in a total of forty (40) private farms covering piggery, poultry, fishery and crop production. The internship followed the completion of classroom-based agricultural training at Songhai Delta, Amukpe.
- Embarked on cost cutting measures to plug wastage and leakages,
- Ensured expenditure was kept within revenue limits,
- Emphasised judicious use of available resources,
- Reduced operating expenditure,
- Made political appointments in a staggered manner, to reduce the impact on the State’s finances,
- Set up a Verification Team to scrutinize the contractual debt profile of the State, ascertain the veracity of outstanding liabilities, and confirm if the contracts were satisfactorily executed, and
- Prioritized our programmes, and the funding of on-going projects/programmes based on their economic/social value.
6. Due to the combined efforts of all – the civil service, the political class and sundry stakeholder groups – I am happy to report that we have been able to achieve substantial level of fiscal stability, thus creating the right conditions for economic prosperity and achieving sustainable development. My gratitude goes to all Deltans for their patience and continued support for this administration in the face of some tough decisions that we have had to take.
7. I also thank this honourable House for its cooperation and support in the past six months, obviously a trying time in which we made far-reaching sacrifices and denied ourselves some entitlements. This sense of mission and unity of purpose are what we need to engender long-term economic development, social harmony, political stability, and general well-being of our people. My sincere appreciation also goes to the Civil Service Establishment, the Nigerian Labour Congress, Trade Union Congress and all workers’ unions and associations for their understanding and support.
8. Mr Speaker, our achievements have not been restricted to the fiscal management of the economy. Permit me to highlight three key
areas of achievement as they demonstrate the import of our S.M.A.R.T agenda.
Creating Wealth, Nurturing Entrepreneurs
9. Job and wealth creation is the focal point of the S.M.A.R.T Agenda, and the crucial point of reference on which this administration will be judged both now and in the future. The core principle of the Job and Wealth Creation Scheme is to put resources (skills, tools and complementary services) in the hands of disadvantaged people – unemployed graduates, secondary school leavers, farmers, artisans - and empower them to move from welfare to self-employment, and also give them employability skills.
10. The existing job and wealth creation programmes include:
1. Youth Agricultural Entrepreneurs Programme (YAGEP)
2. Skills Training and Entrepreneurship Programme (STEP)
3. Production and Processing Support Programme (PPSP)
4. Microcredit (administered by the Delta State Micro, Small and Medium Enterprise Development Agency).
11. There are two hundred and fifty six (256) YAGEP trainees currently undergoing internship in a total of forty (40) private farms covering piggery, poultry, fishery and crop production. The internship followed the completion of classroom-based agricultural training at Songhai Delta, Amukpe.
12. STEP is designed to train and establish unemployed youths in preferred skills or trade, and one thousand and seventy youths (1,070) are taking part in the programme. The PPSP, an agricultural value chain support programme, has a total of three thousand, six hundred (3,600) smallholder farmers and agro-processors, as individuals or groups participating in it.
13. You can’t create jobs without successful businesses. In addition to the presence of basic infrastructure, businesses, especially small scale ones, also need credit at competitive rates. From June 1 to November 30, 2015 the Delta State Micro, Small and Medium Scale Enterprises Development Agency (DMSMA), under the Micro, Small and Medium Scale Enterprises Development Fund, disbursed a total
of four hundred and twenty eight million, one hundred and thirty thousand naira (N428. 13m) as loans to two thousand, five hundred and sixty three persons (2,563). The beneficiaries included eight hundred and fifty one men (851) and one thousand, seven hundred and twelve women (1,712).
13. You can’t create jobs without successful businesses. In addition to the presence of basic infrastructure, businesses, especially small scale ones, also need credit at competitive rates. From June 1 to November 30, 2015 the Delta State Micro, Small and Medium Scale Enterprises Development Agency (DMSMA), under the Micro, Small and Medium Scale Enterprises Development Fund, disbursed a total
of four hundred and twenty eight million, one hundred and thirty thousand naira (N428. 13m) as loans to two thousand, five hundred and sixty three persons (2,563). The beneficiaries included eight hundred and fifty one men (851) and one thousand, seven hundred and twelve women (1,712).
14. The loan recovered during the same period amounted to fifty four million, eight hundred and ten thousand, seven hundred and one naira, seventy four kobo (N54, 810,701.74) only. The Agency also recovered an additional sum of nine million, eight hundred thousand, eight hundred and ninety five naira (N9, 800,895.00) under the Delta State Micro Credit Programme (DMCP).
15. The rate of recovery indicates that our people are not bad debtors. Under the right leadership and with proper motivation, they will act responsibly and do the right thing. As more monies are recovered, it presents opportunities for more people to be empowered to move from poverty to prosperity, and thus realize our goal for social inclusion.
16. The focus of the Delta State Micro, Small and Medium Enterprises Development Agency in 2016 is to strengthen the financial and technical capacity of MSMEs for value added production, increase productivity, facilitate access to markets and create wealth/jobs. The Agency has initiated discussions with national and international Organizations and Agencies involved in MSMEs development, in line with the policy thrust of this administration. Furthermore, the Agency has received positive responses from the private sector on the way forward. We thus look forward to a sustainable industrialized economy in Delta State.
Infrastructure Renewal, Sustainable Development
17. Despite the lean financial resources of the State, this administration has worked hard to upgrade our infrastructure and improve our living environment. Contracts have been awarded for the following projects, which are under different stages of construction:
- Reconstruction/rehabilitation of Sapele Technical College (Sapele Local Government)
- Reconstruction/rehabilitation of Ofagbe Technical College (Isoko North Local Government)
15. The rate of recovery indicates that our people are not bad debtors. Under the right leadership and with proper motivation, they will act responsibly and do the right thing. As more monies are recovered, it presents opportunities for more people to be empowered to move from poverty to prosperity, and thus realize our goal for social inclusion.
16. The focus of the Delta State Micro, Small and Medium Enterprises Development Agency in 2016 is to strengthen the financial and technical capacity of MSMEs for value added production, increase productivity, facilitate access to markets and create wealth/jobs. The Agency has initiated discussions with national and international Organizations and Agencies involved in MSMEs development, in line with the policy thrust of this administration. Furthermore, the Agency has received positive responses from the private sector on the way forward. We thus look forward to a sustainable industrialized economy in Delta State.
Infrastructure Renewal, Sustainable Development
17. Despite the lean financial resources of the State, this administration has worked hard to upgrade our infrastructure and improve our living environment. Contracts have been awarded for the following projects, which are under different stages of construction:
- Reconstruction/rehabilitation of Sapele Technical College (Sapele Local Government)
- Reconstruction/rehabilitation of Ofagbe Technical College (Isoko North Local Government)
- Reconstruction/rehabilitation of Agbor Technical College (Ika South Local Government)
- Construction of Alisimie-Oza Nogogo-Ime Obi Road (Ika South Local Government)
- Construction of dual carriageway rigid pavement at Okerenkoko (Warri South West Local Government)
- Reconstruction/Expansion/Construction of Kefas Road/Old
Emore Rd/Uzere Junction, Oleh (Isoko South Local Government)
Emore Rd/Uzere Junction, Oleh (Isoko South Local Government)
- Completion of Palace Rd., Boji Boji Owa (Ika North East Local Government)
- Construction of Ejiyere str., Dederu str., and Akemu Street (Warri South Local Government)
- Construction of Access Road to Tankers Park, and Rehabilitation, Resurfacing and Construction of Jeddo-Omadino Road through to Eagle Height University
- Dualization of Nnebisi Rd., ( from traffic light junction to Cable
Point), Asaba (Oshimili South Local Government)
- Amukpe/Okirighwre/ATP Roundabout Rd., Dualization (Sapele Local Government)
Point), Asaba (Oshimili South Local Government)
- Amukpe/Okirighwre/ATP Roundabout Rd., Dualization (Sapele Local Government)
- Construction of Onomigbo Street, and Ejinyere str., Orodje Street, Orerokpe (Okpe Local Government)
- Okuvo-Kpokpogri Road, Okuvo (Sapele Local Government)
- Completion of Government Hospital Abavo with provision of start-off equipment (Ika South Local Government)
- We have also provided the sum of one billion (N1b) each to Setraco Nig. Ltd, CCC Nig. Ltd and Hi-Tech Nig. Ltd to remobilise to Trans-Warri Road, Ughelli-Asaba Road (Sector A) and Lagos-Asaba Road respectively.
- The sum of over six hundred million naira (N600million) has been paid to the contractor handling the Sapele Township Market.
- Work has also commenced fully at the Law and Engineering Faculty Complexes at the Oleh Campus of Delta State University.
Consolidating Peace, Promoting Investment
18. The imperative of peace for economic growth and sustainable development cannot be over emphasised. Whilst commending the previous administrations for their efforts in this regard, this administration is committed to creating an investor-friendly climate.
10
Towards this end, we inaugurated a 42-man Peace Building and Advisory Council charged with the mandate to advise Government on proactive measures to curb the problems of youth restiveness, kidnapping, crude oil theft, inter/intra communal land disputes, as well as clashes between Fulani herdsmen and local farmers. Comprising men and women of proven character and integrity in all walks of life, the Council also offers advice to Government on a wide range of governance/development issues.
19. I am happy to report that the Council swung into action as soon as it was inaugurated and its impact is already being felt in the
governance of the State. In addition to providing infrastructure, and improving the ease of doing business in the State, this administration considers the work of the Council critical to maintaining peace and security, germane to an investor-friendly climate in the State.
Economic Performance of the 2015 Budget
Towards this end, we inaugurated a 42-man Peace Building and Advisory Council charged with the mandate to advise Government on proactive measures to curb the problems of youth restiveness, kidnapping, crude oil theft, inter/intra communal land disputes, as well as clashes between Fulani herdsmen and local farmers. Comprising men and women of proven character and integrity in all walks of life, the Council also offers advice to Government on a wide range of governance/development issues.
19. I am happy to report that the Council swung into action as soon as it was inaugurated and its impact is already being felt in the
governance of the State. In addition to providing infrastructure, and improving the ease of doing business in the State, this administration considers the work of the Council critical to maintaining peace and security, germane to an investor-friendly climate in the State.
Economic Performance of the 2015 Budget
20. Mr. Speaker, you will recall that the size of the 2015 approved budget was reconstructed from four hundred and eight billion, eight
hundred and sixty four million naira (N408.864bn) to two hundred and fifty two billion, two hundred and ninety six million naira (N252.296bn), a decrease of one hundred and fifty six billion, five hundred and sixty eight million naira (N156.568bn) or 38.29%. The amount is made up of a recurrent expenditure budget of one hundred and sixty two billion, seven hundred and forty four million naira (N162.744bn) and a capital budget of ninety billion, one hundred and ninety eight million naira (N90.198bn).
21. The profile of the 2015 budget as amended is as follows:
(A) REVENUE
S/N
Sources
Approved 2015 Budget
Approved Revised 2015 Budget
% Appropriation
i
Internally Generated Revenue
61,807,557,497
44,758,181,147
17.69
ii
Statutory Allocation Including Mineral Rev. Derivation
208,873,059,258
137,052,669,603
54.18
iii
Value Added Tax
12,489,588,002
11,968,230,716
4.73
21. The profile of the 2015 budget as amended is as follows:
(A) REVENUE
S/N
Sources
Approved 2015 Budget
Approved Revised 2015 Budget
% Appropriation
i
Internally Generated Revenue
61,807,557,497
44,758,181,147
17.69
ii
Statutory Allocation Including Mineral Rev. Derivation
208,873,059,258
137,052,669,603
54.18
iii
Value Added Tax
12,489,588,002
11,968,230,716
4.73
Sub total
283,170,204,757
193,779,081,466
283,170,204,757
193,779,081,466
iv
Other Capital Receipts
125,694,563,779
59,164,412,963
23.39
Other Capital Receipts
125,694,563,779
59,164,412,963
23.39
Total
408,864,768,536
252,943,494,429
100.00
408,864,768,536
252,943,494,429
100.00
(B) EXPENDITURE
S/N
Details
Approved 2015 Budget
Approved Revised 2015 Budget
% Appropriation
i
Recurrent Expenditure
164,375,828,928
162,744,713,809
64.34
ii
Capital Expenditure
244,488,939,608
90,198,780,620
35.66
Total
408,864,768,536
252,943,494,429
100.00
408,864,768,536
252,943,494,429
100.00
REVENUE BUDGET PERFORMANCE (JANUARY TO SEPTEMBER, 2015)
22. The State Government, during the nine months of January to September, 2015, recorded a total revenue performance of one hundred and fifty two billion, one hundred and five million naira (N152.105bn), representing an overall performance of 80.18% over expected proportionate revised revenue receipts of one hundred and eighty nine billion, seven hundred and seven million naira (N189.707bn). Out of this amount, the sum of ninety one billion, five hundred and twenty nine million naira (N91.529bn) was received as Statutory Allocation from the Federation Account. The amount represents 89.05% performance of the proportionate estimate of one hundred and two billion, seven hundred and eighty nine million naira (N102.789bn).
22. The State Government, during the nine months of January to September, 2015, recorded a total revenue performance of one hundred and fifty two billion, one hundred and five million naira (N152.105bn), representing an overall performance of 80.18% over expected proportionate revised revenue receipts of one hundred and eighty nine billion, seven hundred and seven million naira (N189.707bn). Out of this amount, the sum of ninety one billion, five hundred and twenty nine million naira (N91.529bn) was received as Statutory Allocation from the Federation Account. The amount represents 89.05% performance of the proportionate estimate of one hundred and two billion, seven hundred and eighty nine million naira (N102.789bn).
23. On the other hand, the sum of seven billion, one hundred and seventy seven million naira (N7.177bn) was recorded as receipts from Value Added Tax (VAT) out of the proportionate projected revised estimates of eight billion, nine hundred and seventy six million naira (N8.976bn) representing a budget performance of 79.96%.
24. The sum of thirty one billion, four hundred and sixty million naira ( N31.460bn) was recorded as Internally Generated Revenue (IGR) out of the projected revised revenue of thirty three billion, five hundred and sixty eight million naira (N33.568bn), representing a budget performance of 93.72%. The sum of twenty one Billion, nine hundred and thirty six million naira (N21.936bn) or 49.44% was received from other capital receipts against the revised proportionate budget of forty four billion, three hundred and seventy three million naira (N44.373bn) during the period under review.
24. The sum of thirty one billion, four hundred and sixty million naira ( N31.460bn) was recorded as Internally Generated Revenue (IGR) out of the projected revised revenue of thirty three billion, five hundred and sixty eight million naira (N33.568bn), representing a budget performance of 93.72%. The sum of twenty one Billion, nine hundred and thirty six million naira (N21.936bn) or 49.44% was received from other capital receipts against the revised proportionate budget of forty four billion, three hundred and seventy three million naira (N44.373bn) during the period under review.
25. The breakdown of the revenue receipts from individual revenue sources is provided hereunder:
S/N
Sources
Approved 2015 Budget
Approved Revised 2015 Budget
Proportionate on Revised Revenue Budget Jan-Sept, 2015
Actual Revenue Jan - Sept, 2015
% Per
i
Internally Generated Revenue
61,807,557,497
44,758,181,147
33,568,635,860
31,460,667,098
93.72
ii
Statutory Allocation Including Mineral Rev. Derivation
208,873,059,258
137,052,669,603
102,789,502,202
91,529,898,353
89.05
iii
Value Added Tax
12,489,588,002
11,968,230,716
8,976,173,037
7,177,638,341
79.96
Sources
Approved 2015 Budget
Approved Revised 2015 Budget
Proportionate on Revised Revenue Budget Jan-Sept, 2015
Actual Revenue Jan - Sept, 2015
% Per
i
Internally Generated Revenue
61,807,557,497
44,758,181,147
33,568,635,860
31,460,667,098
93.72
ii
Statutory Allocation Including Mineral Rev. Derivation
208,873,059,258
137,052,669,603
102,789,502,202
91,529,898,353
89.05
iii
Value Added Tax
12,489,588,002
11,968,230,716
8,976,173,037
7,177,638,341
79.96
Sub total
283,170,204,757
193,779,081,466
145,334,311,100
130,168,203,792
89.56
iv
Other Capital Receipts
125,694,563,779
59,164,412,963
44,373,309,722
21,936,799,299
49.44
283,170,204,757
193,779,081,466
145,334,311,100
130,168,203,792
89.56
iv
Other Capital Receipts
125,694,563,779
59,164,412,963
44,373,309,722
21,936,799,299
49.44
Total
408,864,768,536
252,943,494,429
189,707,620,822
152,105,003,091
80.18
408,864,768,536
252,943,494,429
189,707,620,822
152,105,003,091
80.18
26. The above revenue receipts represent an aggregate decrease of sixty one billion, three hundred and ninety five million naira (N61.395bn) or 28.76% over two hundred and thirteen billion, five hundred million naira (N213.500bn) recorded for the corresponding period of January to September, 2014. Statutory Allocation was mainly affected with a significant decrease of fifty three billion, one hundred and forty seven million naira (N53.147bn) or 36.74% over one hundred and forty four billion, six hundred and seventy sevenmillion naira (N144.677bn) recorded for the same period in 2014. Internally Generated Revenue recorded a marginal decrease of 3.84%. Thirty two billion, four hundred and sixty million naira (N31.460bn), was received this year as against thirty two billion, seven hundred and fifteen million naira (N32.715bn) received for the same period in 2014.
EXPENDITURE BUDGET PERFORMANCE (JANUARY TO SEPTEMBER, 2015)
27. As for expenditure, a total sum of one hundred and forty one billion, seven hundred and thirty six million naira (N141.736bn) was spent during the period January – September, 2015. Out of this amount, the sum of one hundred and seventeen billion, eight hundred and fifty six million naira (N117.856bn) was spent on recurrent items as against a proportionate approved budget of one hundred and twenty two billion, fifty eight million naira (N122.058bn) representing a budget performance of 96.56%. The breakdown is summarized below:
27. As for expenditure, a total sum of one hundred and forty one billion, seven hundred and thirty six million naira (N141.736bn) was spent during the period January – September, 2015. Out of this amount, the sum of one hundred and seventeen billion, eight hundred and fifty six million naira (N117.856bn) was spent on recurrent items as against a proportionate approved budget of one hundred and twenty two billion, fifty eight million naira (N122.058bn) representing a budget performance of 96.56%. The breakdown is summarized below:
S/N
Recurrent
Approved 2015 Budget
Approved Revised 2015 Budget
Proportionate on Revised Recurrent Budget Jan-Sept, 2015
Actual Expenditure Jan - Sept, 2015
% Per
i
Personnel Costs
68,531,968,520
68,531,968,520
51,398,976,390
51,328,216,234
99.86
ii
Overhead Costs
54,147,379,541
29,609,641,678
22,207,231,259
18,784,748,567
84.59
iii
Con. Rev. Charge
41,696,480,867
64,603,103,611
48,452,327,708
47,743,549,951
98.54
Recurrent
Approved 2015 Budget
Approved Revised 2015 Budget
Proportionate on Revised Recurrent Budget Jan-Sept, 2015
Actual Expenditure Jan - Sept, 2015
% Per
i
Personnel Costs
68,531,968,520
68,531,968,520
51,398,976,390
51,328,216,234
99.86
ii
Overhead Costs
54,147,379,541
29,609,641,678
22,207,231,259
18,784,748,567
84.59
iii
Con. Rev. Charge
41,696,480,867
64,603,103,611
48,452,327,708
47,743,549,951
98.54
Total
164,375,828,928
162,744,713,809
122,058,535,357
117,856,514,753
96.56
164,375,828,928
162,744,713,809
122,058,535,357
117,856,514,753
96.56
28. The sum of ninety billion, one hundred and ninety eight million naira (N90.198bn) was budgeted for Capital Expenditure. During the year, actual expenditure for the period, January-September, 2015 was twenty three billion, eight hundred and eighty-three million naira (N23.883bn) as against the proportionate budget figure of sixty seven billion, one hundred and sixty three million naira (N67.163bn), representing a budget performance of 35.30%.
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