Abia govt plans to spend N136billion in 2020 fiscal year

2020 ABIA STATE BUDGET OF ECONOMIC REPOSITIONING

PRESENTED BY:

OKEZIE VICTOR IKPEAZU, PH.D

GOVERNOR OF ABIA STATE, NIGERIA

TO THE 7THABIA STATE HOUSE OF ASSEMBLY, 

ON MONDAY, NOVEMBER 18, 2019

Protocol 

I bring to Mr. Speaker and Members of this Honourable House the best regards of the day.

I am delighted to present the Abia State 2020-2022 Medium Term Draft Estimates to this Honourable Assembly for your consideration. I wish to thank all Honourable members of this House for the immense cooperation and collaboration the Executive Arm of Government has received from you in the effort to accelerate the socio-economic development of the State.

Let me also use this medium to thank all Abians, who have demonstrated confidence in our ability to deliver on our promises by re-electing this Administration to serve for another term. We do not take the responsibility Abians have placed on us for granted. We remain resolute in our pursuit of the actualization of our vision and we reaffirm that we will bequeath a bright and prosperous future for all Abians.

Mr. Speaker and Honourable Members, as we are all aware, the global and national economic environments within which the Abia State Government and its citizens operate remain largely precarious.

Global growth projections remain subdued while Nigeria’s economic recovery has thus far been weak. Global growth forecast is expected to marginally inch up to 3.5 per cent in 2020 from 3.2 per cent in 2019. This is against a backdrop of trade wars between the two biggest economies in the world, uncertainty about Brexit and structural slowdown among global emerging economies. 

Yet, within the context of these deep-seated challenges, Abia State Government is determined to reposition Abia State on a new foundation for growth. We have therefore been very methodical in putting together a budget that can help the State receive fresh footing to be able to skip to the top.

This is the reason we have termed this year’s budget ‘the Budget of Economic Repositioning’. 

As you may be aware, Mr. Speaker and Honourable Members, Abia State keyed into the State 

Fiscal Transparency, Accountability and Sustainability as well as the Open Government Partnership Initiatives with the aim of enhancing efficiency in our financial processes. Following this, we have continued to sharpen the process of participatory budgeting which we started a few years back, significantly increasing the number and level of involvement of communities, civil society groups, private sector agencies and other stakeholders in the preparation of the 2020 budget. 

We remain eternally grateful to God for the doors He has so far opened, the successes so far recorded and to this House, for the gracious hand of cooperation and collaboration you have extended to us which has enabled us work together in synergy and harmony for the good of the people of Abia State.

Mr. Speaker, Honourable Members, in preparing this 2020-2022 Multi-year Budget, consideration was given to effective and efficient resource allocation and utilization. In particular, we considered:

• Proper prioritization of peoples’ needs to ensure that programmes and projects meet citizens’ demands as well as guarantee value-for-money in the implementation.

• Careful identification and harmonization of revenue generating windows for effective revenue generation and mobilization towards attaining our set goals for 2020 which is Economic Repositioning.

• Putting appropriate measures in place to cushion revenue leakages, economic waste in resource utilization and to ensure proper resource redistribution. 

• Re-jigging of our Agencies by appointing new Managements for them whom we are confident, will be able to interpret our visions for those Agencies and deliver multi-sectoral growth for the whole of Abia State.

Mr. Speaker, the draft estimates are intended to strategically strengthen our achievements in areas such as creating conducive environment for local and foreign investors, providing opportunities for human capital development, revitalizing social services as well as building critical infrastructure for sustainable development. We are not unaware of the need to close loopholes in resource mobilization and usage. Consequently, our watchword in the 2020 budget implementation shall be “Prudence in State Resource Management”. 

2019 FINANCIAL REVIEW

Mr. Speaker, Honourable members, as at third quarter of 2019, the Revenue Receipt was Forty-

Nine Billion, Three Hundred and Ninety-Three Million, One Hundred and Ten Thousand, Seven

Hundred and Forty Naira, Thirty Five Kobo (N49,393,110,740.35) only. This is made up of 

Statutory Allocation of Thirty Eight Billion, Nine Hundred and Forty Million, Nine Hundred and Ninety Three Thousand, Eight Hundred and Thirty Six Naira Sixty One kobo (N38,940,993,836.61) only and Independent Revenue of Ten Billion, Four Hundred and Fifty 

Two Million, One Hundred and Sixteen Thousand, Nine Hundred and Nine Naira, Seventy Four kobo (N10,452,116,909.74) only.

The Independent Revenue showed a significant shortfall. This drawback is as a result of the 2019 election which slowed down Government business activities . The total budget outlay for 2019 was One hundred and Forty Billion, Two hundred and Seven Million, Three hundred and Seventy-one Thousand, Two hundred and Ninety Naira (N140,207,371,290) only. As at the Third Quarter of 2019, the total expenditure was Forty-Two

Billion, Eight Hundred and Forty Six Million, One Hundred and Twenty-Seven Thousand, Seven

Hundred and Ninety Three Naira, Eighty Eight Kobo (N42,846,127,793.88) only.

It is envisaged that considerable increase in Capital Expenditure would be recorded by the end of the Fourth quarter as we await the onset of the dry season.

THE 2020 BUDGET:-

In 2020 fiscal year, we shall further strengthen Governance with renewed commitment to 

People’s well being through intense citizens’ engagement and Community Needs Identification 

Initiative (CNII) in project selection to meet the Community Charter of Demand (CCD).

There will be deliberate efforts to sustain measures and improve on our internally generated revenue as well as measures to encourage various economic empowerment programmes to reduce the level of poverty and unemployment among the youths. 

The strategic premise for the 2020 budget include:-

• Provision of enabling environment for investors.

• Completion of on-going projects.

• Encourage and support entrepreneurship development.

• Development of human capital.

• Massively promote Made in Abia Goods and Services

• Development of Agricultural value chain.

• Initiate strategic reforms and sustain value reorientation in the Public Service.

• Support growth of SMEs

• Intensify the realization of the Enyimba Economic City project

• Sustain our commitment to the provision of needed infrastructure

• Provide environment for Peace and Security.

We are adopting an innovative approach towards engagement of resources and partnership with 

Stakeholders to bring about different results; we must be bold in our approach.

In addition to engaging a wide variety of stakeholders and potential beneficiaries in the preparation of the budget, we also adopted a unique complementation of executive and bureaucratic exigencies in the identification and pooling of priorities, the planning of resource engagement and the methodologies for achieving results. 

In the same vein, we are emphasizing partnerships such as partnership with the Legislature and 

Judiciary, and between the Legislature and Judiciary, partnership between the State and the 

Federal Government; between the State and Local Governments, partnership among MDAs, partnership with International Development Agencies, with the private sector and partnership between elected and appointed officials and relevant MDAs. 

Our focus remains to change the economic development template of the State but the emphasis of method will be on programme linkages. We no longer need stand-alone visions, we need integrated approaches. Policies, programmes and projects from the various sectors will have to speak to each other and build bridges towards the wholesome repositioning of the State economy.

We will work to have MDAs synergize and tap into complementary capabilities while avoiding duplication of functions and projects and the attendant economic waste. Strategic partnerships shall be the fulcrum and main driver of our vision for the year 2020.

In 2020, we will work to ensure completion of ongoing projects while re-envisioning new ones that will open new frontiers. We are determined to eliminate waste and unjustified expenditures that are not directly linked to the policy objectives espoused in this document. In addition, for the 2020 fiscal year, we will ensure that only projects and programmes provided for in the 2020 budget are funded. 

Mr. Speaker, after due consideration of relevant macroeconomic indices and prevailing variables, the estimated budget for 2020 fiscal year is One hundred and Thirty-Six Billion, Six Hundred and Seventeen Million, Three hundred and Sixteen Naira (N136,617,847,316) only.

This Budget outlay is slightly less than the One hundred and Forty Billion, Nine hundred and Forty-four Million,eight hundred and eighty-five Thousand, Seven hundred and seventy Naira (N140,944,885,770) only of 2019. This moderate decrease is occasioned by our resolve to formulate a realistic budget, while working hard to improve revenue generation and expenditure management approach. 

The draft budget is made up of a total sum of Sixty Six Billion, Eight Hundred and Two 

Million, Two Hundred and Forty Seven Thousand, Three Hundred and Sixteen Naira

(N66,802,247,316) only as Recurrent Expenditure and Capital Expenditure of Sixty Nine 

Billion, Eight Hundred and Fifteen Million, Six Hundred Thousand (N69,815,600,000) only.

The Recurrent Expenditure represents 48.90 percent of the total Budget while the capital expenditure represents 51.10 percent of the Budget.

Recurrent Revenue:In 2020 fiscal year, the expected total inflow is One Hundred and Six Billion, Nine Hundred and Thirty Eight Million, Five hundred and Forty Seven Thousand, Three Hundred and Sixteen Naira(N106,938,547,316) only. This is made up of Sixty-Seven Billion, Two Hundred and Forty-Nine Million, Three Hundred Thousand, Naira (N67,249,300,000) only, from the statutory allocation of the Federation Account Allocation Committee (FAAC) representing 62.89 percent of the Recurrent Revenue, while the Independent Revenue is projected to be Thirty Nine Billion, Six Hundred and Eighty Nine Million, Two Hundred and Forty Seven Thousand ,Three Hundred and Sixteen Naira (N39,689,247,316)only representing 37.11 percent.

EXPENDITURE:-

The Proposed Recurrent Expenditure for the year 2020 is Sixty-Six Billion, Eight Hundred and 

Two Million, Two Hundred and Forty Seven Thousand, Three Hundred and Sixteen 

Naira (N66,802,247,316) only as against Sixty-Seven Billion, Eight Hundred and Thirteen Million, One Hundred and One Thousand, Two Hundred and Thirty Naira (N67,813,101,230) only for the previous year which represents a decrease of 1.00 Percent. 

The details of the recurrent expenditure indicates that the personnel cost is Twenty-Nine

Billion, Three Hundred and Eight Million, Six Hundred and Forty Four Thousand, Six Hundred and Six Naira (N29,308, 644, 606)only. While the overhead cost is Eighteen Billion,Four

Hundred Million, Five Hundred and Seventy Nine Thousand, Six Hundred Naira (N18,400,579,600) only and the Consolidated Revenue fund charges (CRFC) is Nineteen Billion,

Four Hundred and Ninety-Three Million, Twenty-Three Thousand, One Hundred and Ten Naira 

(19,493,023,110) only.

Personnel Cost – N29,308,644,606

Over Head Cost – N18,400,579,600

Consolidated Revenue Fund Charges (CRFC)- N19,493,023,110

Mr. Speaker and Honourable members, the estimated Capital Expenditure in 2020 is Sixty-Nine

Billion, Eight Hundred and Fifteen Million, Six Hundred Thousand Naira (N69,815,600,000) only. 

This represents 51.10 percent of the total budget. The capital expenditure is the real investment 

expenditure. It is the component of budget that drives our economic growth and development 

programme. The Summary of the Capital Expenditure according to sectoral allocation is as 

follows:-

Administrative Sector – N7,863,800,000

Economic Sector- N44,448,300,000

Law and Justice – N329,000,000

Social Sector – N16,774,500,000

ADMINISTRATIVE SECTOR:-

We appreciate that administration, particularly the public sector, is the pillar upon which efficiency and sustainability rest. Therefore, my Administration has made the reform of the public service a major plank of its goals. First, we decided to open up our governance to Local and International scrutiny through signing up to the Open Government Partnership Initiative. We also successfully signed up to the Fiscal Sustainability Programme where external auditors reviewed financial and other processes that are in use here in Abia. 

We are happy to announce that the State has received commendation and other rewards from that exercise. Encouraged, we proceeded to sign on to the State Fiscal Transparency, 

Accountability and Sustainability (SFTAS) Programme under which we are being evaluated along 18 disbursement linked indicators. We are meticulous and methodical to ensure that Abia, over a short space of time, is able to excel in all these indicators. 

We have entered into partnership with the Federal Bureau of Public Service Reforms (BPSR) and have started evaluations with intent to know the ailments in the several areas of public service delivery and determine which areas attention should be given first. 

We have officially stopped the extension of service for all civil servants and have determined that henceforth, all appointments and promotions shall be strictly based on Public Service Rules. We intend to extend this to the Local Government Service at the appropriate time.

In 2019, we participated in a contest involving the six states in the Eastern part of the Niger Delta in respect of those with the best potential development plan – and we came first. Following that, the Partnership Initiative for Niger Delta Development (PIND) is supporting the State to develop a 30-year development plan. The process is currently on-going, and we have insisted that every sector and MDA shall develop a sector-wide development plan which shall flow from and be linked to this multi-year State-wide development plan. All these are aimed at ensuring that every institution in the State is working towards the same (and known) goal. 

ECONOMIC SECTOR:-

Mr. Speaker and Honourable members, the growth projections I earlier spoke about at both national and global economies will mostly be driven by technology and trade. These are two areas where Abia State has critical competitive advantage.

We intend to engage those competitive advantages to the utmost level possible. Our budget is relatively conservative, not only because we are constrained, but also because we recognize that the key driver for the economy we envisage and are working towards is the Abia private sector.

Government resources are expected mostly to be deployed into incentivizing and guiding the private sector while providing them with sustainable infrastructure they need to produce. We will intensify our engagement of resources towards the pursuit of on-going partnerships for the realization of the Enyimba Economic City, the standardization of products from Abia State, provision of industrial clusters and provision of funds for operators in the textile and leather industries in the State. 

It is expected that the first phase of construction work on the Enyimba Economic City project shall commence in the 2020 fiscal year in collaboration with our private partners. The goal is to enhance our people’s capacity to take advantage of the opportunities provided by growth in global trade and innovations in technology. We are not only eyeing the Nigerian market, we are taking Abia to Africa and the rest of the world. And because we know the opportunities are there, by the Grace of God and your esteemed support, we will get there. 

Let me at this juncture commend the 6th Abia State House of Assembly for their legislative support in enacting the law backing the Enyimba Economic City Project. This has ensured that the drivers of the project have greater confidence and security in driving the project.

We will continue our support to Agriculture as a key pillar in the State’s development agenda. 

And we are also doing that slightly differently. While intensifying support for primary production, our focus is also shifting to agro-processing. We have earmarked four products – rice, palm produce, cassava and poultry. In this category, we will continue to boost both the production and marketing of Abia rice and other specific products. To motivate production through price stability, we have strengthened our Marketing and Quality Management Agency to help mop up these products and ensure their best standards. 

In the 2020 fiscal year, effort towards the completion of all ongoing rural road projects to enhance linkages to markets shall also be intensified. As you may be aware, we have advanced in the Rural Access Mobility Programme (RAMP) which has drawn up large swaths of road to be completed in the 2020 fiscal year. 

Other ancillary infrastructure like the Isiala Ngwa Dry Port shall also be vigorously pursued. We are rebuilding markets and shall continue to train our traders and artisans on global best practices to increase their competitiveness. We shall engage every legitimate instrument to ensure our capacity to advance Abia products in the global market place and integrate technology into the productive activities of our people. 

All these are besides the deliberate programme of re-invigorating all ailing industries in the State. We all must celebrate the re-opening of Golden Guinea Breweries Plc. Permit me to announce to you that efforts have started in earnest to restore other moribund industries in Abia State. The Administration has deliberately separated the Ministry of Industry from Trade and Investment, so that it may give attention to this purpose. No effort will be spared by this Administration to see these industries back to production. By the grace of God, when I will stand to give you the budget speech for 2021, we will announce that one or more of these firms have come back to production.

SOCIAL SECTOR:-

Two segments of the social sector – education and health – are enablers in this Administration’s development agenda. Therefore, our commitment towards each of them remains unflinching. We are growing, not only the quantity, but also the quality of education in Abia. As we are all aware, Abia State has consistently taken the first position in the Senior Secondary Certificate examination for upwards of four years. This is not a ruse; it is the product of consistent policy and investment in educational transformation. We are rebuilding schools, rebranding and restructuring the incentives to teachers and working to strengthen the education curriculum by integrating technical education into it. 

Our programme of building the capacity of teachers through continuous training and retraining on core subjects using cluster approach via the Teachers Continuing Training Centre in the State remains ongoing. Our policies in Education so far have raised the enrolment in public schools across board. The school lunch programme in the state will be sustained to further improve the outcomes in 2020.

This Administration will continue to support and cooperate with our state owned Tertiary 

Institutions to ensure that they maintain their track- record of excellence and produce the needed skilled labour to be fed into the emerging industries and factories in the State.

Abia State University has thus far ran four complete sessions without any form of disruption. The distorted employment situation in Abia Polytechnic, which has been a major drag on the Institution’s academic and research progress, has also been resolved and the school is back on its feet. A study team went through and made elaborate recommendations on repositioning Abia State College of Health Sciences and Management Technology, Aba and the College of Education, Arochukwu. We took those recommendations seriously and immediately placed both institutions on priority list. This has seen massive improvements in their performance over the last couple of months. We intend to sustain these moves knowing that these institutions are the bedrock upon which manpower development that will bring about the technology-driven Abia economy which we are striving to achieve rests. Once again, we wish to thank the House of Assembly for their support in these ongoing reforms.

This Administration has always taken provisions and protection of women, youths, children and the vulnerable very serious. We have done a lot over the last few years in helping reinstate the vulnerable through building donations and targeted fight against Gender Based Violence 

(GBV).

Government will also increase the funding of revolving micro finance loans initiatives to empower women in the rural areas.We have also deliberately re-integrated the Ministry of Youths with Sports so as to re-invigorate the synergy between the two and make sports a job creation platform for our youths. In addition, and still in the spirit of partnership, we expect that the Ministry of Education shall work with them to ensure that we get grassroots sports competition back to the mainstream in the 2020 fiscal year.

Government is mindful of the challenges faced by Pensioners and is making deliberate effort to addressed pension and other debt arrears. In the year 2020 the Administration will embark on data capturing to re-verify and ensure only genuine pensioners and contractors are paid.

Mr. Speaker and Honourable members of the House, Abia State can no longer be isolated and side-lined in development assistance programmes. We are presently at the forefront of so many intervention programmes. These have helped in providing soft funding for activities that we, ordinarily, would have not been able to undertake at the moment given resource constraints.

In the Health sector alone, we have the Save One Million Lives programme, the Health-Plus 

Programme, the Agency for the Control of Aids, among several others. The E-WASH

programme is here. The YESSO programme has been activated to work with E4E and deliver the best of both training and funding to our women and youths. The DFID PERL, particularly the Enlightened Citizens Pillar (ECP), has been very active in helping the State in its avowed goal of reaching out to and integrating the rural populace in its policy formulation. 

In 2020, we shall continue and expand these collaborations. Our gender and child-care support 

programmes have continued to receive support from UNFPA, UNICEF, UKAid, World Bank and other non-governmental organizations. Abia was one of the few states where returnees from 

Libya have been completely assimilated and reintegrated with retraining programmes.

The Half -way home, the Children Park and other programmes for vulnerable groups will also be sustained and funded to ensure that every Abian, no matter the disability and initial conditions, continue to get the best in support to meaningful life. 

Our recent efforts towards improving Environmental Sanitation have not been without results. 

The repositioning of the Environmental Sanitation Agency and the creation of Environmental 

Sanitation Agencies at city levels are aimed at making them more responsive towards the local waste management situation. Government has invested significant amounts in equipping and helping them change the narrative in waste management. The results for both Aba and Umuahia have been quite encouraging. We pledge that the unbundling of our waste management Agency will be complete before the end of 2019.

At the same time, we are quite aware of the ecological threats posed by soil erosion to several parts of the State. The NEWMAP programme and the State’s collaboration with the Federal Government under the ecological fund shall both be intensified to handle these. 

We have also particularly made provisions to use other less resource-intensive local technologies to deal with these erosion sites. In addition, we have budgeted for early warning signaling systems across the whole State which shall be coordinated by the Ministry of Environment to ensure that henceforth, potential erosion sites are identified on time and not allowed to blossom to unmanageable proportions. We shall continue to collaborate with other Federal and International Agencies to reclaim and rehabilitate the gully sites in the State. 

Mr. Speaker, Honorable members, we shall endeavour to be prudent in the management of the resources available, to enable us realize our objectives. We know we face resource constraints, but we also know we can do so much with the little available to us. Therefore, we intend to make the most of resources in the coming fiscal year. As is the tradition, further details of this Budget will be made available by the Honorable Commissioner for Finance.

CONCLUSION:-

Mr. Speaker, I have not only come to present the Fiscal Estimates for 2020, I have come to seek your usual hand of brotherly fellowship towards repositioning Abia State in 2020. We are undaunted by the challenges of the global economy, we do not shrink back from facing the rough tempest of the peculiarities of the Nigerian economy. Instead, these winds provide the wings upon which we ride to realizing the vision the people of Abia set for us when they elected us together to pilot their affairs. We have no doubt that working together we can deliver on our promises and commitments. 

This House has been an admirable partner in the attainment of our corporate objectives and I have no doubt that we will do even more in 2020. I once more thank you immensely, and indeed all Abians, for the immeasurable support and understanding as I lay the Abia State 2020

Appropriation Bill before you for your anticipated expeditious consideration and passage.

Thank you and may God continue to bless Abia State.

Okezie Victor Ikpeazu, Ph.D, FNES

Governor, Abia State 

November 18, 2019