BUDGET OF REALITY
ADDRESS BY HIS EXCELLENCY, UMARU TANKO AL-MAKURA, GOVERNOR OF NASARAWA STATE ON THE OCCASION OF THE PRESENTATION OF THE 2014 FISCAL APPROPRIATION BILL TO THE NASARAWA STATE HOUSE OF ASSEMBLY, LAFIA:
MONDAY, 30TH DECEMBER, 2013
1. The Right Honourable Speaker;
2. Principal Officers and Honorable Members of the Nasarawa
State
House of Assembly.
I am pleased to be here today to present before this Honourable House,
the Nasarawa State Appropriation Bill for the 2014 fiscal year in
compliance with Section 121(1) of the 1999 Constitution of the Federal
Republic of Nigeria (as amended).
2. Mr. Speaker, let me commence this address by expressing my
profound
appreciation to this Honorable House for the continued partnership
and sustained cooperation with this Administration towards the
realization of our development aspirations.
3. This collaboration, I must state, has so far impacted
positively in
improving the standard of living of the people of Nasarawa State.
4. Mr. Speaker, let me point out that it is this unity of
purpose that
informed the decision of Honorable Members to cut short their recess
to enable me perform this important function for the wellbeing and
socio-economic development of our dear State.
5. I commend your sacrifice and sense of patriotism in our
collective
determination to move Nasarawa State to greater heights.
6. Mr. Speaker, it is pertinent to note that despite our
modest
efforts to accelerate the pace of development of our State, there are
still some challenges considering the infrastructural deficits
vis-à-vis available resources at our disposal.
7. We must, as leaders, ensure that the scarce resources are
maximally
and judiciously utilized for the benefit of our people.
Review of the Year 2013 Budget
8. Mr. Speaker, Honourable Members, you would all recall that
in 2013
I presented to this Honourable House, a total Budget of One Hundred
and Ten Billion, One Hundred and Forty-six Million, Six Hundred and
Seventy-two Thousand, Six Hundred and Seventy-two Naira
(N110,146,672,672.00) only.
9. This was made up of Forty-two Billion, Three Hundred and
Thirty-one
Million, One Hundred and Fifty-five Thousand, Seven Hundred and
Seventeen Naira (N42,331,155,717.00) only as Recurrent Expenditure,
while the sum of Sixty-seven Billion, Nine Hundred and Fifty-nine
Million, Five Hundred and Sixteen Thousand, Nine Hundred and
Fifty-five Naira (N67,959,516,955.00) only was earmarked for Capital
Expenditure.
Highlights of Year 2013 Budget
10. The 2013 budget was focused on the following areas:
i. Completion of all on-going projects initiated by this
Administration especially roads and educational infrastructure;
ii. Completion of inherited abandoned projects considered
essential
for the socio-economic development of our State;
iii. Improvement and enhancement of internal revenue
generation;
iv. Commencement of new projects that have direct bearing on
the
wellbeing of our people;
v. Adherence to the principle of due process in the application
and
utilization of resources;
vi. Promotion of an enterprise society through job creation
and youth
empowerment; and
vii. Computerization of land administration and management in
the State;
viii. Digitization of information management/ broadcast
system;
ix. Consolidation of peace and security.
Performance of the 2013 Budget
11. Mr. Speaker, Honourable Members, as at the end of 2013
fiscal
year, only Fifty-nine Billion, Forty-six Million, Eight Hundred and
Seven Thousand, Five Hundred and Sixty-five Naira, Forty-nine Kobo
(N59,046,807,565.49) only was realized out of the One Hundred and Ten
Billion, One Hundred and Forty-six Million, Six Hundred and
Seventy-two Thousand, Six Hundred and Seventy-two Naira
(N110,146,672,672.00) estimates. This represents 53.61%.
12. Out of the total receipts for the period under review,
actual
Recurrent Expenditure stood at Forty-four Billion, Thirty-five
Million, Two Hundred and Thirty-eight Thousand, Three Hundred and
Twenty-eight Naira, Seventy-five Kobo (N44,035,238,328.75).
13. On the other hand, Capital Expenditure summed up to
Eleven
Billion, Four Hundred and Eighty-six Million, Five Hundred and Sixty
Thousand, Two Hundred and Seventy-four Naira, Seventeen Kobo
(N11,486,560,274.17) only.
14. The Rt. Hon. Speaker would recall that the receivables
under the
2013 Budget assumptions were premised among other revenue resources,
on the determination of Government to access N20Billion from the
capital market. Regrettably, due to the rigorous regulatory processes
inherent in the issuance of Sub-National Bonds, we were unable to
obtain requisite approvals from the Regulatory Agencies until on the
27th of December, 2013.
15. This has without doubt affected the performance of the
2013 Budget.
16. Mr. Speaker, Honorable Members, despite the challenges in
the
accruals of revenue in 2013 fiscal year, this Administration made
concerted effort to meet peoples’ expectation through the execution of
policies and programmes, particularly the massive urban and rural road
construction, healthcare delivery, water and power supply, education,
agriculture, among others.
Fiscal Risk and State Government Financial Trend in 2013
17. The beginning of the current financial year showed that
we put in
place measures to reduce recurrent spending to a reasonable level,
while increasing our investment on the capital side.
18. However, it is worthy of note that our recurrent
expenditure has
continued to grow and overwhelm capital expenditure.
19. In 2013 fiscal year, recurrent spending accounted for
about
eighty percent (80%) of Government total spending. This is not a
pleasant state-of-affairs, considering the fact that our incomes are
disproportionately expended on recurrent expenditure.
20. This situation is as a result of the challenge in the
structure
of our wage bill and the fact that Pension of Civil Servants who
retired from active service are transferred and continue to increase
with its attendant consequences.
21. In addition to the wage bill, the various security
challenges have
increased our recurrent expenditure. Inspite of that, Government has
remained consistent on payment of contractual liabilities.
The 2014 Fiscal Appropriation
22. Mr. Speaker, Honourable Members, the 2014 budget proposal
is an
entirely new exercise that is anchored on International Public Sector
Accounting Standards (IPSASs’), which is consistent with the
international financial reporting and best practices. This new Chart
of Accounting system improves accountability, transparency and
prudence in Government spending.
23. The 2014 appropriation, therefore, hopes to continue in
the
achievement of our development objectives in the following areas:
i. Completion of projects already started;
ii. Enhancement of Internal Revenue Generation (IGR);
iii. Social services;
iv. Market development;
v. Housing infrastructure;
vi. Value re-orientation;
vii. Rural roads network;
viii. Youth Empowerment and Capacity
building;
ix. Enhanced monitoring and control systems through due
process mechanism;
x. Creation of enabling environment for Public-Private
partnership (PPP);
xi. Reduction of overhead expenditure;
xii. Continued collaboration with Development Partners;
xiii. Guaranteed loans (Bonds) subscription;
xiv. Environmental sustainability and recreation.
24. Mr. Speaker, Distinguished Members, the 2014 fiscal
framework
envisages improved efficiency in revenue administration and
generation. In addition, Government intends to be strict in
expenditure control to ensure efficiency in spending and
accountability.
25. The objective here is to ensure that spending by
Ministries,
Departments and Agencies (MDAs) is set at prudent, sustainable and
reasonable levels that are consistent with our reality and level of
financial position.
Parameters and Basic Assumptions of the 2014 Budget
26. In drawing up the budget, therefore, Government is guided
by the
global economic trend with the attendant fluctuations in commodity and
capital markets, as well as our internal revenue generation capacity.
Our assumptions are basically dependent on the Federal Government
Fiscal Strategy Paper, considering that statutory revenue allocation
from the Federation Account is the major source of revenue to the
State.
27. The following are, therefore, our assumptions:
i. At the minimum, we do not expect revenue to fall below
2013 levels;
ii. Expected improvement in IGR into Government treasury,
taking into
consideration additional stringent measures put in place by ensuring
that all revenue collecting institutions improve in their
effectiveness and efficiency in collection and remittance;
iii. Increased economic growth and development through
implementation
of policies, programmes and projects, and;
iv. As earlier alluded, our Reporting Accountants-KPMG
Consulting in
concurrence with the Debt Management Office and the Securities and
Exchange Commission after a review of our 2012 accounts, advised the
State to apply for a N10Billion bond. Accordingly, the Federal
Ministry of Finance in conjunction with Securities and Exchange
Commission approved the N10Billion Nasarawa State Bond Issuance
Programme in two tranches of N5Billion each. We are set to access the
first tranche of the N5Billion early January, 2014 and the second
tranche hopefully by the middle of 2014. This, Mr. Speaker, is a
demonstration of confidence by the Federal Government of Nigeria, and,
indeed, the Investors on our Fiscal Policies and our agenda for the
provision of basic infrastructures in the State.
Anticipated Revenue Receipts in 2014
28. In the light of the foregoing, I am delighted to announce
that the
2014 Appropriation anticipates a total revenue of One Hundred and
Fourteen Billion, Five Hundred and Forty-five Million, Four Hundred
and Twenty-four Thousand, Three Hundred and Forty-three Naira
(N114,545,424,343) only which translates into the total expenditure
outlay.
29. This shows a marginal increase of Four Billion, Three
Hundred and
Ninety-eight Million, Seven Hundred and Fifty-one Thousand, Six
Hundred and Seventy-one Naira (N4,398,751,671) or 3.99% over and above
the 2013 appropriation. The details of these figures are contained in
the estimate’s document which I shall lay before you.
30. Mr. Speaker, Honourable Members, the 2014 Appropriation
is
christened “Budget of Reality”. This is in keeping with the commitment
of this Administration on transparency and accountability towards the
fulfillment of its pragmatic and realistic promise to the good people
of Nasarawa State.
31. Accordingly, the 2014 budget is to be funded from the
following
anticipated revenue sources:
A. Opening balance/savings transferred from consolidated
revenue funds
to Capital Development Fund of N10.5 Billion.
B. Federation Account
i. Statutory revenue allocation of N40 Billion;
ii. Excess crude oil receipts of N5 Billion;
iii. Value Added Tax (VAT) of N10 Billion;
iv. SURE-P of N2.5 Billion;
v. Refund from NNPC of N10.3 Billion.
C. Internally Generated Revenue (IGR) of N13.174 Billion.
D. Aid and Grant of N13 Billion;
E. Bonds of N10 Billion.
EXPENDITURE ESTIMATES FOR YEAR 2014 BUDGET
Recurrent Expenditure
32. The sum of Fifty-nine Billion, Five Hundred and
Ninety-two
Million, Seven Hundred and Twenty-eight Thousand, Three Hundred and
Fifty-nine Naira (N59,592,728,359) representing 52.03% of the budget
is earmarked for Recurrent Expenditure.
Capital Expenditure
33. The sum of Fifty-four Billion, Nine Hundred and Fifty-two
Million,
Six Hundred and Ninety-five Thousand, Nine Hundred and Eighty-four
Naira (N54,952,695,984) representing 47.97% of the total budget is
earmarked as Capital Expenditure for the year 2014.
2014 Total Budget Size
34. Mr. Speaker, Honourable Members, a total budget size of
One
Hundred and Fourteen Billion, Five Hundred and Forty-five Million,
Four Hundred and Twenty-four Thousand, Three Hundred and Forty-three
Naira (N114,545,424,343) only is presented for the 2014 budget
Sectoral Highlights
35. The key budgetary provisions in the 2014 appropriation
for the
various sectors based on International Public Sector Accounting
Standards (IPSASs’) guideline are as follows:
a) Administrative Sector:
o General Administration/
Legislation
– N15.37 billion
o Pension Bureau
– N2.09 billion
o Information & Ethical
Re-Orientation
– N1.35 billion
o Civil Service Matters
– N1.10 billion
Sector Sub-Total – N19.89 billion
b) Economic Sector:
o Agriculture and Water
Resources
– N10.19 billion
o Environment and
Natural Resources –
N706.71 million
o Works, Housing and
Transport
– N10.10 billion
o Commerce & Industry
– N3.51 billion
o Rural & Community
Development
– N3.12 billion
o Lands & Urban Development- N11.42
billion
o Finance, Planning and
Investment
– N15.90 billion
Sector Sub Total – N58.57 billion
c) Law & Justice Sector:
o Ministry of Justice
– N336.8 million
o High Court of Justice
– N2.28 billion
o Customary Court of Appeal- N269.18
million
o Sharia Court of Appeal
– N274.69 million
o Judicial Service Commission- N189.29
million
Sector Sub Total – N3.35 billion
d) Social Sector:
o Education
– N12.05 billion
o Higher Education
– N9.31 billion
o Health
–
N12.19 billion
o Sports and Youth
Development
– N1.77 billion
o Women and Social
Development
– N548.16 million
Sector Sub Total- N35.82 billion
36. Mr. Speaker, Honourable Members, permit me to give a
brief outline
of some of the critical areas of focus in the 2014 budget. In this
regard, Government intends to:
i. Embark on the completion of all on-going road construction
projects
started by this Administration, as well as the prioritization and
completion of road projects abandoned by previous Administration. In
addition, this Administration intends to embark on the construction of
new roads which were hitherto not included in the on-going exercise.
ii. Step up the process of the construction of an Aerodrome
in Lafia,
the State capital. This is intended to expand the transport system,
improve security, attract investment and boost tourism in the State;
iii. Construct, expand and rehabilitate infrastructure
facilities in
our educational institutions;
iv. Grant free education from Primary to Secondary School
level, as
well as award of scholarship for normal children;
v. Grant free education for disabled persons from Primary up
to tertiary level.
vi. Promotion of science education to support medical and
technical needs;
vii. Construct, upgrade and rehabilitate healthcare
facilities and
services in the State including School of Nursing and Midwifery. In
realizing this objective, Government has already commenced contract
for the construction of three (3) comprehensive hospitals in each of
the three senatorial districts of the State and signed Memorandum of
Understanding (MoU) to equip them for optimal performance in
healthcare delivery system. In the same vein, Government has taken
deliberate steps to make Primary Healthcare system functional and
efficient, including immunization and associated preventive healthcare
measures;
viii. Free healthcare services for the disable;
ix. Continue our effort in agricultural development through
encouragement of commercial agricultural enterprise and for the small
and subsistence farmers, Government will continue to ease fertilizer
procurement and distribution at hugely subsidized rate while improving
on extension services;
x. Wealth creation and job opportunities through our youth
and women
economic empowerment programmes;
xi. Explore potentials for the development of the power
sector through
negotiations and collaboration with prospective development partners
and entrepreneurs in order to harness the new transmission power
infrastructure of 330KV passing through the State and also using
renewable energy technologies in order to expand sources of energy in
the State.
37. Mr. Speaker, Honourable Members, before I conclude this
address,
let me reiterate that the task ahead of us is enormous. We must,
therefore, continue to strive to meet the expectations and development
aspirations of the people of Nasarawa State. We must continue to
commit ourselves to the fulfillment of the social contract which we
all entered into with the electorate. No sacrifice is too much in the
service of our people and humanity.
38. Let us all continue to be the beacons of hope that we are
to the
people of Nasarawa State by rising to the challenges of progress and
socio-economic development of our society.
39. On this note, Mr. Speaker, Honourable Members, it is my
honour and
privilege to lay before this Honourable House the 2014 Appropriation
Bill, tagged Budget of Reality, for your kind consideration and speedy
passage.
40. Thank you and God bless.
