BUDGET OF REFORMATION

Speech Delivered by His Excellency, Umaru Tanko Al-makura, Governor of Nasarawa State on the Occasion of the Presentation of the 2017 Fiscal Appropriation Bill to the Nasarawa State House of Assembly, Lafia: Wednesday, 14th December, 2016

1. The Right Honourable Speaker;

2. Principal Officers and Honourable Members of the Nasarawa State House of Assembly.

It is with gratitude to God the Almighty and with utmost delight that I stand before this honourable Assembly to present to the Honourable Members of the Nasarawa State House of Assembly, the 2017 Appropriation Bill in compliance with section 121 (1) of the 1999 Constitution of the Federal Republic of Nigeria (as amended).

2. Mr. Speaker, Honourable Members, it will be recalled that last year about this period, I stood before this hallowed chamber to appraise the performance of this Administration in line with our policy thrust focused on infrastructure development, provision of social amenities and other social services

3. For these past five years, therefore, this Administration has remained focused in the delivery of policies, programmes and projects that are critical to the socio-economic development of our people. In the journey so far, we have made modest efforts which are rooted in transparency and accountability. These virtues have been the driving force behind the successes so far recorded in our quest for a better Nasarawa State.

4. Mr. Speaker, Honourable Members, I wish commend the commitment of this Honourable House in its efforts to sustain the sanctity of the partnership between the Executive and the Legislature. Indeed, your patriotic contributions have continued to add impetus to our collective resolve to provide exemplary leadership for our people. This is how it should be. It is hoped, therefore, that this partnership between the two arms of Government will wax stronger now given the difficulties the State and the Nation are facing due to economic challenges.

5. Mr. Speaker and Honourable Members, as you are aware, the current economic recession has continued to pervade the Nigerian economy. This has had adverse effects on the smooth implementation of government policies, programmes and projects, including the payment of salaries and statutory overheads. Similarly, the Internally Generated Revenue (IGR) of Government is also at its lowest ebb. The value of our currency has continued to depreciate against the dollar. This has significantly affected the socio-economic development of the country, including our dear State which can be seen in sporadic and incessant industrial imbroglio by workers all over the country. Government is working closely with Labour leadership both at State and National levels with a view to making the coming year stress free by prioritizing expenditures in order to ensure workers’ salaries and welfare are fully enjoyed.

6. This unfortunate situation is further exacerbated by the continued dwindling of monthly Allocation from the Federation Account to the State as a result of the interplay of both macro and micro economic and financial factors.

7. Notwithstanding this, our Administration is undaunted in our resolve to move Nasarawa State to greater heights. Accordingly, Government has remained focused in the execution of projects and programmes that have direct bearing on the lives of our people. These include construction of roads, healthcare delivery, sports development, education, power, water supply, agriculture, markets development among others. Similarly, we have committed enormous resources for the welfare of the physically challenged, women and children, as well as other vulnerable groups in our society. This is in tandem with our policy of “All-inclusive Governance”. Accordingly, our administration has fully constructed a comprehensive special school in Lafia to cater for children of all categories of disabilities from kindergarten to senior secondary school levels. Similarly, the special schools in Keffi and Gudi to be completed and ready for use next year.

8. Honourable Members of the House, in line with the policy direction of this Administration, Government will put in place necessary mechanism in order to stimulate the economy. In this regard, we intend to provide support to the informal sector by enhancing the capacity of small, medium and large scale businesses, and also encourage intensive agricultural production, mining activities, commercial trading and cooperative initiative in our efforts to stimulate the economy.

9. Mr. Speaker, you may wish to note that in our concerted efforts to enhance the delivery of social services, this Administration declared a state of emergency on education and health sectors with remarkable successes especially with the rehabilitation of premier boarding schools in each of the 3 senatorial zones. More efforts where also put in place to ensure the fast-tracking to ensure the completion of specialist hospitals in Lafia, Akwanga and Nasarawa. This is in addition to the full refurbishment of School of Health Keffi and the full completion of School of Nursing Lafia. In this connection, Government intends to sustain the existing school feeding programme in order to encourage massive school enrolment, retention and completion in consonance with our quest to provide education for all school-going children in Nasarawa State with emphasis on Girl-child education and encouragement of children with disabilities. Youth support programmes are also in place to engage our youth. This is the rationale behind the employment of 3,000 youth and the upgrade of the State stadium in Lafia to international standard. This will surely mitigate youth against restiveness and give them hope for a better future. Worthy of mention is the plight of people displaced as a result of conflicts. I comment the resilience and dignified ways our displaced citizens endure the challenges devoid of the complex and humiliation of IDP’s. government has planned to quickly reconstruct all public facilities and support rehabilitation of persons affected between now and first quarter of 2017 in the areas most affected. Giving the proximity of the State to the federal Capital FCT, and the need to support federal Government and FCT, at the same time create an avenue for diversification of revenue generation, Government has declared the 13,000Ha Gurku-Kabusu land as planned area in order to provide alternative homes to Nigerians wishing to reside within that corridor. This is in line with our resolve since 2011 to make the Greater karu corridor the ‘Maryland’ of Abuja. This will be complimented by the commissioning of Karu International Market early next year which will be the largest market in the whole of Northern Nigeria.

10. Mr. Speaker, Honourable Members, let me at this juncture present to you the 2017 Budget proposal. It is my hope that you will appreciate the justification for the allocations.
Review of the Year 2016 Budget

11. Mr. Speaker, Honourable Members, you would recall that in 2015, I presented to this Honourable House, a total Budget of Seventy-seven Billion, Nine Hundred and Seventeen Million, One Hundred and Twenty-six Thousand, Seven Hundred and Ninety-nine Naira (N77,917,126,799) only for the 2016 fiscal year.

12. The proposal was objectively deliberated by the Honourable Members of the House. Based on the economic realities at that time, a total of Seventy-nine Billion, Three Hundred and One Million, Eight Hundred and Fifty Thousand, Five Hundred and Ninety-eight Naira (N79,301,850,598) only was passed into Law. However, Government had cause to submit a supplementary budget to the tune of One Billion, Six Hundred and Fourteen Million, Four Thousand, Nine Hundred and Thirty-five naira (N1,614,004,935) only to the Honourable House, bringing the total budget for 2016 to Eighty Billion, Nine Hundred and Fifteen Million, Eight Hundred and Fifty-five Thousand, Five Hundred and Thirty-three Naira (N80,915,855,533) only which this Honourable House approved.

13. Out of the budgeted amount, Mr. Speaker, Forty-four Billion, Five Hundred and Fifty-nine Million, Three Hundred and Eighty-seven Thousand, Nine Hundred and Sixty-four Naira (N44,559,387,964) only was earmarked for Recurrent Expenditure, while Thirty-six Billion, Three Hundred and Fifty-six Million, Four Hundred and Sixty-seven Thousand, Five Hundred and Sixty-nine Naira (N36,356,467,569) only was earmarked for Capital Expenditure.

Highlights of Year 2016 Budget
14. The 2016 budget was focused on the following areas:
i. Completion of some on-going projects;
ii. Enhancement of Internal Revenue Generation (IGR);
iii. Market development;
iv. Rural roads network especially, bridges;
v. Job creation, youth empowerment, skill acquisition and human capital development;
vi. Creation of enabling environment for Public-Private Partnership (PPP);
vii. Aviation infrastructure development;
viii. Emergency intervention in Education to include Science and Technical Education, Special Education, as well as restructuring and rehabilitation of secondary schools and tertiary institutions, including commissioning of Special Schools for People Living with Disability (PLWD);
ix Improvement in Healthcare Service Delivery;
x Commissioning and equipping of water projects in Nasarawa, Daddere, Toto and Nassarawa-Eggon in the first quarter of 2016 and e-Libraries in Keffi, Lafia, Nasarawa and Akwanga Local Government Areas, respectively;
xi. Continued collaboration with Development Partners;
xii. Agricultural Liberalization with emphasis on extension services, encouragement of commercial farming and cottage industry for value chain;
xiii. Pragmatic approach to solid minerals exploration and exploitation in collaboration with the Federal Government and partnership with investors as alternative sources of revenue generation.

Performance of the 2016 Budget
15. Mr. Speaker, Honourable Members, Government envisaged revenue accruals of Seventy-nine Billion, Three Hundred and One Million, Eight Hundred and Fifty Thousand, Five Hundred and Ninety-eight Naira (N79,301,850,598) only. But as at October 2016, only Forty-three Billion, One Hundred and Four Million, One Hundred and Two Thousand, Two Hundred and Sixteen Naira, Forty-four Kobo (N43,104,102,216.44) only was realized. This represents 54.35% of the total expected revenue for 2016.

16. During the period under review, a total of Twenty-four Billion, Six Hundred and Eighty Million, Three Hundred and Eighty-four Thousand, Two Hundred and Twenty-six Naira, Thirty Kobo (N24,680,384,226.30) only was spent on Recurrent items.

17. Conversely, Eighteen Billion, Four Hundred and Twenty-three Thousand, Seven Hundred and Seventeen Thousand, Nine Hundred and Ninety Naira, Fourteen Kobo (N18,423,717,990.14) only was spent on Capital Projects.

18. Mr. Speaker, Honourable Members, you would recall that the accruals under the 2016 Budget assumptions were premised, among other revenue sources, on Government determination to access the second tranche of the N10 Billion Bond from the capital market, N10 Billion Federal Government Infrastructure Development Loan, as well as N1 Billion Commercial Bank Loan. However, Government was able to access N16.1 Billion comprising Infrastructure Development Loan of N10 Billion and N6.1 Billion Budget Support Facility of the Federal Government, respectively.

19. In spite of the challenges in the accruals of revenue in 2016 fiscal year, this Administration made concerted efforts to continue with programmes and projects that meet the peoples’ aspiration. Worthy of note are the massive urban and rural roads construction, healthcare delivery, markets development, water and power supply, education and agriculture, among others. Some of these projects have been completed and commissioned during the year under review.

Fiscal Risk and State Government Financial Trend in 2016:

20. The Rt. Hon. Speaker, despite the measures put in place by this Administration to reduce recurrent spending during the current year to a reasonable level and increase investment on capital projects, they yielded little result as recurrent expenditure continued to grow and override capital expenditure.

21. In this wise, recurrent spending accounted for about thirty-one percent (31%) of Government total spending against twenty-three percent (23%) capital expenditure in the 2016 fiscal year.

22. This Administration was able to effectively manage our debt profile, keeping it at relatively moderate level. Government is, therefore, servicing only the first tranche of the Bonds collected in 2014, Federal Government infrastructure concessional loans, as well as some long term outstanding Development Partners facilities. All of these have relatively low interest rates with long time repayment periods.

The 2017 Fiscal Appropriation
23. The Rt. Hon. Speaker, Distinguished Members, let me remind you that Government has been consistent in using the new accounting standard known as International Public Sector Accounting Standard (IPSAS), which is in line with the international financial reporting and best practices. I wish to reiterate that this new accounting system improves accountability, transparency and prudence in management of Government resources.

24. Mr. Speaker, the focus of Government in the 2017 fiscal year is as follows:
i. Completion of projects that will turn the economic fortune of the citizenry, as well as stimulate the economy out of recession;

ii. Encouraging and supporting youth in agricultural production as a way of empowerment, boosting production, developing value chain and strengthening commercial venture for a stable economy;

iii. Creating conducive environment for participation of informal sector in income generation and sustainable productivity;

iv. On security, government is working closely with operatives to promote protection of lives and property. This is yielding a positive result as the State is enjoying unfettered peace which has improved our economic activities.

25. Mr. Speaker, Honourable Members, the current economic recession in which we find ourselves has continued to constrain our inflow. It is for this reason that Government decided to strengthen internal control mechanism in public financial management. Accordingly, Government intends to continue to strictly monitor activities of Ministries, Departments and Agencies (MDAs) in line with the fiscal expenditure framework of this Administration.

Parameters and Basic Assumptions of the 2017 Budget:

26. In drawing up the 2017 budget, Government is guided by the fluctuations in the Statutory Revenue Allocation (SRA) from the Federation Account which forms the major source of revenue to the State. We are also mindful of the poor performance of the IGR resulting from the recession facing the entire country.
27. The following, therefore, are our basic assumptions:
i. Government was unable to realize all the resources that our budget was based on in 2016. This, thus, informed our resolve to streamline the 2017 estimates along more realistic, pragmatic and achievable targets; and

ii. This Administration is determined to achieve economic growth through prudent management of resources and investment in areas that will cushion the effects of the recession.

Anticipated Revenue Receipts in 2017
28. Mr. Speaker, the total expenditure outlay is in the sum of Sixty-seven Billion, Thirteen Million, Fifty-seven Thousand, Seven Hundred and Fifty-three Naira (N 67,013,057,753) only.

29. The 2017 Appropriation anticipates a total of Fifty-three Billion, Nine Hundred and Ninety-one Million, Nine Hundred and Ninety-one Thousand, Eighty-five Naira (N53,991,991,085) only. The deficit will be financed by the Federal Government Budget Support Facility, as well as opening balance for 2017.
30. The budget framework shows a decrease of Thirteen Billion, Nine Hundred and Two Million, Seven Hundred and Ninety-seven Thousand, Seven Hundred and Eighty Naira (N 13,902,797,780) or 17.18% as against the 2016 appropriation. The details of these amounts are contained in the estimate’s document which I shall lay before you.

31. The Rt. Hon. Speaker, Honourable Members, in keeping faith with the commitment of this Administration to move the State to the next level, Government is equally committed to tackling the economic recession, the 2017 Appropriation is, therefore, christened “Budget of Reformation”.

32. Accordingly, the 2017 budget is to be funded from the following anticipated revenue sources:
A. Opening balance of N 6.42 Billion.

B. Federation Account
i. Statutory Revenue Allocation of N22 Billion;
ii. Value Added Tax (VAT) of N8.5 Billion;
iii. Exchange Gain of N2.5 Billion;
iv. Special Allocation of N300 Million;

C. Internally Generated Revenue (IGR) of N7.53Billion.

D. Aids and Grants of N6.98 Billion;

E. Budget Support Facility of N8.98 Billion;

F. Commercial Bank Loan/Overdraft of N10.00 Billion

EXPENDITURE ESTIMATE FOR YEAR 2017 BUDGET

Recurrent Expenditure
33. A total of Thirty-seven Billion, Twelve Million, Two Hundred and Fifty-one Thousand, Eight Hundred and Nineteen Naira (N37,012,251,819), representing 55.23% of the budget is earmarked for Recurrent Expenditure.

Capital Expenditure
34. The sum of Thirty Billion, Eight Hundred and Five Thousand, Nine Hundred and Thirty-four Naira (N30,000,805,934), representing 44.77% of the total budget is earmarked as Capital Expenditure for 2017 fiscal year.

2017 Total Budget Size
35. Mr. Speaker, Honourable Members, I am delighted to lay before you a total budget size of Sixty-seven Billion, Thirteen Million, Fifty-seven Thousand, Seven Hundred and Fifty-three Naira (N67,013,057,753) only for the 2017 fiscal year.
Sectoral Highlights
36. On the whole, the 2017 appropriation for the various sectors is as follows:
a) Administrative Sector:
o General Administration/
Legislation - N11.18 billion
o Pension & Gratuity- N3.05 billion
o Information & Culture- N0.640 billion
o Civil Service Matters - N0.579 billion
Sector Sub-Total - N15.45 billion

b) Economic Sector:
o Agriculture & Water
Resources - N3.04 billion
o Planning, Finance &
Investment - N7.98 billion
o Works, Housing and
Transport - N11.19 billion
o Commerce & Industry -N0.869 billion
o Rural and Community
Development -N0.532 billion
o Lands & Urban
Development - N4.47 billion
Sector Sub Total - N28.95 billion

c) Law & Justice Sector:
o Judicial Service
Commission - N0.125 billion
o Ministry of Justice- N0.236 billion
o High Court of Justice- N1.61 billion

o Customary Court of
Appeal - N0.160 billion
o Sharia Court of Appeal- N0.161 billion
Sector Sub Total - N2.29 billion

d) Social Sector:
o Education - N11.88 billion
o Health - N7.27 billion
o Youth & Sports
Development - N0.822 billion
o Women & Social
Development - N0.178 billion
o Environment & Natural
Resources - N0.174 billion
Sector Sub Total - N20.32 billion

37. Mr. Speaker, the onus of moving out of this recession lies with all of us. The task ahead is, no doubt, herculean and challenging. However, in our collective determination, I am optimistic that we would weather the storm in order to give the people of Nasarawa State great hope.

38. On this note, Mr. Speaker, Honourable Members, it is my honour to lay before this Honourable House the 2017 Appropriation Bill tagged Budget of Recovery for your kind consideration and speedy passage.

39. I wish you all a blessed and prosperous new year.

40. Thank you and God bless.