Analysing A ‘Budget Of Enduring Legacy’

On December 28, 2017, The Governor, State of Osun, Ogbeni Rauf Aregbesola presented the 2018 Draft Budget in the sum of N173,980,083,007 before the State House of Assembly, presided over by the Speaker, Honourable Najeem Salaam. The budget presentation was the last fiscal journey of the incumbent administration which would end on November 26, 2018. KAZEEM MOHAMMED was at the budget presentation and he writes. 

So far, Governor Rauf Aregbesola had presented eight budget estimates before the State of Osun House of Assembly, out of which seven had been passed and executed at various percentages, while the eighth one is pending before the parliament. The last budget, meant for the 2018 fiscal year was presented on the 28th of December 2017 and tagged ‘Budget of Enduring Legacy’. The draft budget as presented before the parliament was N173,980,083,007. The estimate is 16 per cent higher than the 2017 approved budget which stood at N146,632,746,980.

The budget presentation was in compliance with Section 121 (1) of the 1999 Constitution of the Federal Republic of Nigeria, as amended, which states that “The Government shall cause to be prepared and laid before the House of Assembly at any time before the commencement of each financial year, estimates of the revenues and expenditures of the State for the following year”.

The recurrent expenditure of the proposed balanced budget of ‘Enduring Legacy’ is N85,105,590,726 representing 49 per cent of the total estimate, and Capital Expenditure N88,874,492,281 representing 51 per cent of the budget. The ratio seems to be in line with recommendations by various experts that government should ensure that capital expenditure is higher than recurrent expenditure in the budget as a yardstick to guarantee development.

Governor Aregbesola said that the 2018 budget was to consolidate all the various achievements his administration had recorded in those various sectors and sub-sectors of the economy in the last seven years. It was also to leave an enduring legacy for the State in line with the policies and programmes of his administration, bearing in mind that it was going to be the last budget to be presented by his administration.

The budget, Aregbesola said, was “equally targeted towards ensuring the completion of all the ongoing projects as much as we can and with a view to bringing about continuous improvement in the socio-economic wellbeing of the people of Osun. Like the previous years’ budgets, the 2018 budget is in line with the Six-Point Integral Action Plan of our administration; and has also been packaged towards ensuring achievements of the Sustainable Development Goals (SDGs) in the state in line with the national economic policy and international best practices”.

“Our ultimate goal for the 2018 Budget is to ensure a continuous improvement in the welfare and standard of living of our people. This will be achieved by consolidating the previous achievements of this administration and doing everything possible to recover the lost glory of the state. Thus, the 2018 budget has been carefully packaged to ensure the effective realisation of our vision as encapsulated in our Six-Point Integral Action Plan.

“It is important to intimate this august Assembly that the preparation of the 2018 Budget has been very participatory. Relevant inputs were sourced and received from various stakeholders across the state in order to enhance the quality of the Budget”, the governor said.

The breakdown of the proposed revenue of the budget, shows that the government is expecting, N27,064,054,430 (15.56) as government share of FAAC; government share of VAT, N8,870,044,300 (5.10); government share of Excess Crude Account, N77,780,840 (0.04); other revenue from FAAC, N5,052,679,630 (2.90); personal taxes, N25,142,496,000 (14.45); corporate taxes, N9,713,000,000 (5.58); licenses – general, N1,599,640,000 (0.92); fees – general, N20,863,528,350 (11.99); fines – general, N182,085,000 (0.10); sales – general, N2,258,594,450 (1.30); earnings –general, N3,683,227,100 (2.55); rent on government buildings – general, N335,776,500 (0.19); rent on land & others – general, N279,085,000 (0.16); repayment-general, N26,025,957,907 (14.96); investment income, N462,950,000 (0.27); interest earned, N60,458,590 (0.03); re-imbursement general, N632,800,000 (0.36); domestic aids N5,749,000,000 (3.30); foreign aids, N795,607,070 (0.46); domestic grants, N7,979,390,530 (5.59); foreign grants, N4,381,500,000 (1.52). The current year receipt totaled, N151,955,945,697 (87.34). Under Financing Of Specific Projects By Other Capital Receipt, the expected revenue from internal source, is N1,500,000,000 (0.86), external source N20,524,137,310 (11.80), totaling N22,024,137,310. Therefore, the total projected fund available for the implementation of the budget is N173,980,083,007.

 

Table 1:

Summary Of The Draft 2018 Revenue Budget

Percentage of the Total Revenue (%)

The analysis above showed that the government is expected to finance the 2018 budget largely with Internally Generated Revenue, particularly from taxes – personal and corporate – and other levies and fees. This is an indication that for the government to be able to carry out its projection for the year, all stakeholders must perform their civic responsibilities through payment of taxes, levies and dues.

On the projected expenditure for the year, Personnel Cost is N33,367,229,660 (19.18); CRFC (Personnel), N9,183,139,080 (5.28); other recurrent – overhead, N14,527,340,146 (8.35); CRFC (Overhead), N28,027,881,850 (16.11); Assets/Capital, N76,507,826,281 (43.98); CRFC (Capital), N12,366,666,000 (7.11), all totaling N173,980,083,007, making it a balanced budget.

 

On the capital expenditure on sectoral basis,  the administrative sector would gulp N10,298,104,640 (11.59); economic sector N60,362,255,770 (67.92); law and justice sector N902,939,500 (1.02); regional sector, N15,000,000 (0.11) and social sector N17,211,192,371 (19.37). However, the economic sector takes the largest part of the capital budget with 67.92 per cent, followed by social sector with 19.37 per cent, administrative sector with 11.59 per cent, law and justice sector with 1.02 per cent and regional sector with 0.11 per cent.

Based on functions, the general public services will gulp N24,481,246,820 (27.55); public order and safety N1,334,191,720 (1.50); economic affairs N35,724,119,520 (40.20); environmental protection N969,737,950.00 (1.09); housing and community amenities N9,854,451,660 (11.09); health N2,611,873,680 (2.94); recreation, culture and religion N302,498,830 (0.34); education N12,504,590,629 (14.07); social protection N1,091,781,472 (1.23).

The analysis of the budget has shown that the government is more committed to the economic sector as the estimated budget projects the government readiness to embark on policies and programmes that would revamp the economy and in return banish poverty, banish unemployment and banish hunger among the people of the state.

It would be recalled that the 2017 budget of N146,632,746,980 was targeted at achieving a similar purpose to enable government execute certain vital projects and programmes that could improve the wellbeing of the people, but the governor, while presenting the 2018 estimates said, “arising from the volatile nature of the international oil market which has resulted in the low price of crude oil, dwindling revenue of the State and limitation in the capacity of the state government to obtain internal and external facilities as a result of the stringent Federal Government of Nigeria/CBN regulations; and the unimpressive performance of our IGR, our intention to achieve 100 per cent implementation of the budget was greatly hampered.

“This development therefore makes it inevitable that there is the urgent need to depend less on allocations from Federation Accounts and concentrate efforts on how to grow the IGR. At this juncture, I need to solicit the support and cooperation of all the good people of the state to ensure that they fulfil their civic responsibilities by way of payment of all taxes and levies due to the state government. This is of absolute importance if we are to implement our budget”, Aregbesola restated.

EDUCATION

A total sum of N12,504,590,629, representing (14.07) of the total budget is estimated for the education sector which was described by the governor as the key to sustainable development. Based on this, any serious government that is desirous of transforming the State into an economic haven will not joke with education.

The governor said, since coming on board, his administration has not relented in its avowed resolve to revamp the education sector from the rot it inherited, saying, “we have since taken giant strides to re-construct and re-structure the education sector in order to restore quality and promote functional education at all levels in the state.

He recalled that the state under his administration operates a free Primary and Secondary Education and in addition provides Opon Imo (Computer Tablets) and other required instructional materials to pupils and students in all Public Schools. Apart from this, the improvement in the nutritional and health status of pupils being fed through Osun Elementary School Feeding Programme (O-MEALs) has helped to improve the production capacities of farmers, suppliers of farm produce and has empowered many women who were appointed Food Vendors by the State.

He also said, in order to improve the staffing situation in schools and considering the paucity of fund at the disposal of the Government, there will be deployment of Public Servants with teaching qualifications in some core subjects, in line with the on-going unification policy of the State Government, while the system of engaging Youth Corps members in the teaching of students will continue.

The governor noted that his administration, through the State Universal Basic Education Board (SUBEB) in collaboration with the Universal Basic Education Commission (UBEC), Abuja and the Education Tax Fund (now Tertiary Education Tax Fund (TETFUND) has completed the construction of six Model High Schools, 20 Elementary Schools and 22 Middle Schools.  More than 50 per cent of the schools under construction have been completed and commissioned while others are at various stages of completion will be completed before the expiration of his administration in November 2018.

Aregbesola who hinted that adequate provisions have been made for the sector in the 2018 budget, noted that the administration will remain irrevocably committed to the joint ownership and co-funding of the Ladoke Akintola University of Technology, Ogbomoso and the College of Health Sciences, Osogbo with the Oyo State Government, just as he stressed that “we will continue, as usual, to meet our financial obligations to the higher institution in the 2018 fiscal year within the limit of available resources.

HEALTH

A total sum of N2,611,873,680 (2.94) is budgeted for the health sector in the 2018 budget estimates to compliment the remarkable achievements made by the government so far in the areas of infrastructural development, improvement in the health equipment status in our hospitals, and distribution of medical consumables and capacity building through sponsorship of health workers on further studies.

The governor said, in line with our vision, we are prepared to continue to save our people from avoidable deaths due to emergencies, poverty, and inadequate health facilities, saying, the administration will ensure increased accessibility to qualitative healthcare services in all parts of the state by completion of all on-going projects and specifically ensuring that the renovations and upgrading of the 9 State Hospitals in the State are fully completed.

“In 2018, this administration will continue to provide essential drugs and medical consumables in all our hospitals at subsidised rate.  The ‘O’ Ambulance Scheme, no doubt, has been used to save a lot of lives in situations of emergency in the State.  More efforts will be made in the New Year to make the scheme more functional to achieve the purpose for its establishment.  Regarding Primary Health Care and Disease Control, a lot of intervention activities will continue to be carried out, including spraying of houses under the indoor Residual Spraying (IRS) in the Malaria Control Programme in three Pilot Local Government Areas, distribution of Insecticide Treated Nets to pregnant women and children as well as distribution of drags tables to health facilities, as well as awareness and sensitisation programmes for the control of diseases like malaria, Avian Flu, Tuberculosis HIV/AIDS, Monkey Pox etc.

“Regarding LAUTECH Teaching Hospital, Osogbo, the government will continue to perform its statutory responsibilities towards the Institution as it has always been doing.  LAUTECH Teaching Hospital is a Centre of Excellence known for the provision of quality tertiary health services to the people of the State of Osun in particular and Nigeria as a whole.   It needs to be mentioned that through innovation and ingenuity of the management of the hospital, we now produce oxygen which is used locally within the hospital as well as for sale to other health care providers. The hospital has also begun production of essential drugs and consumables”.

AGRICULTURE AND RURAL DEVELOPMENT

Osun, being an agrarian economy with arable fertile soil, can only move forward positively by revolutionising agriculture and the governor said, his administration will continue to put agriculture on the front burner of the state economy, as it would not only provide employment for the teeming masses, it will also encourage rapid agro-allied industrialisation of the state, generation of income and improved welfare of the citizenry.

Aregbesola said, in the 2018 fiscal year, the state government will continue to commit resources to promote and encourage robust investments in Agriculture, saying new projects and programmes to serve emerging needs of agriculture as a business would be considered. Among the projects to be considered are: Development of three abattoirs and cattle markets in Osogbo, Iwo, Ilesa/Ife in the State of Osun in order to ensure the consumption of wholesome meat by the populace and also to grow IGR; collaboration with International Institute of Tropical Agriculture (IITA) to enhance distribution of improved varieties of crops and uplifting agriculture from peasantry to commercial farming; encouraging Public-Private Partnership (PPP) through CBN-NIRSAL Anchor Borrower Programme (ABP) in the running of the Agriculture Projects to enhance sustainability and overcome constraints associated with meeting budgetary expectation.

Others are expansion of Fish Farm Estate to squarely address animal protein deficiency in the diet of our people. Interested Fish Farmers shall be allocated land space for fish pond construction including Service Providers in the area of Hatchery, Feed Mill and Fish Processing Establishments in the Estate; assisting farmers in the areas of Agricultural Mechanization, deployment of new technology, Soil testing and food laboratories in order to reduce drudgery and youth aversion to agriculture as well as boost the productivity of agricultural factors of production, among others.

INDUSTRIALISATION, FINANCE, INDUSTRY, COMMERCE AND COOPERATIVES SECTOR

Given the importance attached to this sector a sum of N60,238,255,770 has been allocated to sector in the draft 2018 Budget.

The sub-sectors under this sector are:

Transportation (Works)

Having recognised road construction and maintenance as pivotal in the achievement of economic, social and political goals, the governor said his administration is determined, with all patriotic zeal, to increase the tempo of construction and rehabilitation and maintenance works within the 9 Federal Constituencies of the state. He hinted that there had been massive construction and rehabilitation of over 1500km of Intercity and Intra-city roads, including an appreciable kilometres length of rural and Local Government roads across the length and breadth of the State where several billions of naira had been committed.

In a bid to salvage the State from the scourge of poor road networks and with total commitment to the security of lives of citizenry, he said his administration has taken a giant stride to embark on the dualisation of Gbongan–Akoda Dual carriage way, Adebisi Akande Trumpet interchange Bridge and Osogbo (Old Garage)–Ikirun–Ila–Odo–Erinle–Kwara State Boundary, while the construction of MKO Abiola International Airport at Ido–Osun is currently on–going which is first of its kind in the history of the State.

The governor who emphatically said that his administration would do everything possible to complete all its ongoing projects across the state, was categorical that Oba Adesoji Aderemi Osogbo East Byepass road would be completed before he leaves office in November.

Industrialisation

The State Government had entered into a Memorandum of Understanding (MoU) with a foreign firm for the resuscitation and sustainable operation of Cocoa Products Industry, Ede. Full operation is expected to commerce at the factory very soon. All necessary and preliminary works had been carried out for the establishment of three factories at the Omoluabi Free Trade Zone, Abere, in Ede North Local Government Area of the State.

Other sub-sectors are finance, commerce among others.

YOUTHS, SPORTS AND SPECIAL NEEDS

Aregbesola said it is the plan of his administration that the Osun Youth Empowerment Scheme (OYES) committee will commence preparation for the engagement of another batch of the 20,000 volunteers for the scheme very soon. The OYES since inception, has attracted accolades and commendation from both far and near.  The World Bank has adopted the scheme as a template for youth empowerment all over the world.  The Federal Government of Nigeria has fashioned Youth Empowerment and Social Support Operation (YESSO) and You-Win after of OYES.  The laudable scheme, which provided instant employment to 20,000 unemployed agile youths of the state is designed to be a rolling scheme so that many youths of the State will benefit from the initiative.  The volunteers on the scheme are expected to disengage after two years of participation to give opportunity for another batch.

Aregbesola who assured that the 2018 Budget will be objectively and faithfully implemented appealed to all and sundry to continue to cooperate with his government in the arduous task of remoulding the state by always performing their civic responsibilities, saying, “the welfare of our people will continue to be accorded top priority, our activities will continue to be guided by the highest regard for the people of the state.