Saturday, February 21, 2009
Being the text of the 2009 Edo State Budget read on the floor of the State House Of Assembly on Monday, 16th February 2009 by The Executive Governor Of Edo State, Comrade Adams Aliu Oshiomhole:
Mr. Speaker, Honourable Members of Edo State House of Assembly
I wish to express my profound appreciation to the Honourable House for the opportunity to present
The 2009 Budget Estimates for Edo State. Let me again use this occasion to acknowledge and appreciate the magnitude of cooperation extended to my administration over several issues that have arisen in the interaction between the Executive and Legislative arms of government. I wish to assure you of my irrevocable commitment to sustaining this partnership. This is necessary for the progress of Edo State and the welfare of our people.
2. Our Approach to budgeting
As the first budget presentation of this administration, it is necessary for me to re-state that we take the budgetary process very seriously. Therefore, the preparation and presentation of our budgets will not be a mere-annual ritual. Accordingly, we have thoroughly analysed the desirability and feasibility of all the capital projects while the recurrent headings have been painstakingly scrutinised and streamlined.
3. The 2009 Budget - Overall Vision
Mr. Speaker, the 2009 budget is a Budget of a New Beginning.
It is designed to kick-start the integrated, accelerated, sustainable and people-driven development of Edo State. Our vision is to transform Edo State qualitatively through the empowerment of our people with the resources, infrastructures, institutions and all-inclusive policies to enable them live more productive and secure lives.
In Edo State, for too long, it has been Government as usual, to the unfortunate extent that the people have virtually resigned to the notion that government is a burden, rather than an institution for meeting popular aspirations. We insist that our people are entitled to a government that works and a society that cares.
In consultation with major segments of the populace and the various agencies of government, this administration has identified the major development challenges we need to confront, namely:
1. Poor infrastructure, especially intra-city and rural roads;
3. Poor agricultural output and a primitive rural economy;
4. Flooding, erosion and other forms of man-made environmental nuisance, including the
wilful blocking and non-maintenance of existing drainages, particularly in Benin City;
5. A decadent public school system;
6. Poor and inaccessible public health facilities;
7. Insecurity of lives and property;
8. Absence of potable water; •
9. A top-heavy, poorly trained, ill-equipped and thus under-performing public service and
high overhead costs;
10. Housing shortage;
11. A chaotic transportation system, especially intra-city;
12. Epileptic power supply and absence of electricity in most of the rural areas;
13. A hostile operating environment for productive activities in the real sector.
Our communities in the oil producing and riverine areas have peculiar and more acute problems inflicted by the natural terrain and the environmental consequences of oil exploration.
Addressing these and other multifarious crises certainly requires a huge outlay of financial resources. Yet, we have assumed stewardship at a time of a deepening global financial crisis and steady erosion of the capacity of national, state and municipal governments to deal with development challenges.
Today in Edo State like the rest of Nigeria, we are confronted with a drastic decline in revenue arising largely from the persistent fall in allocations from the Federation Accounts. This is compounded by our meagre internally generated revenue. At an average of N350 million monthly as internally generated revenue, Edo State is grossly under-performing. All we earn in taxes is one-quarter of the monthly personnel and overhead costs.
Worse still, we met the state in a total mess. In the period immediately preceding our tenure, the massive inflows of monthly revenues, including those from the Excess Crude Account and Paris Club Debt Forgiveness Funds, were squandered. Not only were the funds squandered, Prof Osunbor left a total liability of N9.8 billion, made up of N5.1 billion in approved vouchers and a N4.7 billion loan.
This administration met very many abandoned and poor quality capital projects, especially roads and drainages, which were clearly designed to siphon funds. Not only were the contracts inflated, the quality of execution was a far cry from the massive sums paid to contractors, most of whom lacked the requisite capacity to execute the projects. The result is that in spite of the over N50 billion Prof Osunbor received from the Federation Accounts in 18 months, there is no evidence that much had happened in the life of the people. In some cases, it was established that cash withdrawals were made from Government accounts and paid into private bank accounts.
Our covenant with Edo State is to place government at the service of the people, who had fought so hard and made heroic sacrifices to install it. It follows therefore, that we will not join the bandwagon of lamentations and prophecies of tougher times for the people. Today, the challenge is to provide a more imaginative and purposeful leadership, to re-order our priorities, eliminate wastages and manage available scarce resources prudently, in order to meet the high expectations of the people. This will require looking inwards to tap available sources of revenue and block all leakages.
4. The 2009 Budget - Objectives and Priorities
Our major objective this fiscal year is to stimulate employment-led productive activities, create additional jobs, improve infrastructures, combat poverty and enhance the quality of life.
Mr. Speaker, in order to maximise the impact of the limited resources available, we have carefully re-appraised the challenges I outlined earlier; we have also carefully determined the priority areas for decisive intervention this fiscal year. Much as it is desirable to address all the identified problem areas, the fact of very limited resources makes this impossible. Therefore, we have identified three major critical priority areas for decisive government intervention this fiscal year. Mr. Speaker, these areas are:
2. Drainage rehabilitation, flooding and erosion control; and
3. Primary and post-primary education.
Even as we have identified these priority areas, we are also focusing more particularly on Benin City this fiscal year in order to deal decisively with the flooding and erosion problems. After diligent evaluation, the expert opinion is that disilting the drainages and fixing the erosion and flooding crisis require a holistic approach based on the Benin City master plan. Such a holistic approach will require. massive investment in construction and a substantial capital outlay to mobilise highly reputable and competent contractors to the sites. This government wants to avoid the ineffective piecemeal approach of the past and the use of roadside and emergency contractors, selected based on political patronage. This explains why we have devoted nearly a third of the capital budget this fiscal year to restoring the Benin City master plan.
The idea is to avoid the mistake of the past, which was to spread funds too thinly every where and make no impact anywhere. While some might argue that this new and holistic approach is not equitable, the reality is that Benin City is home to people from all the other local governments. This means that the positive social and economic effects of this investment will accrue to all. In any event, the benefit of an elected government with a clear four-year mandate is that over the rest of our tenure, this administration will execute projects in other sectors and the rest of the State, such that the entirety of the people will ultimately feel the impact of development. Therefore, it is not this year or never! Of course, we have also allocated funds for capital projects in the areas of health, water, rural electrification, industry, sports, agriculture and other areas.
5. Highlights of the 2009 budget
Mr. Speaker, the sum of N75.54 billion is being proposed for the 2009 fiscal year. The breakdown is as follows:
1. Recurrent revenues - N35.66 billion;
2. Capital receipts - N39,88 billion.
The projected revenue is made up of the following components:
1. Statutory allocation - N20 billion
2. Internally generated revenue - N15.6 billion
3. The 13% mineral Derivation N0.50 billion
4. VAT - N4.72 billion
5. Ecological Fund - N3.00 billion
Out of the N75.54 billion, the sum of N45.38 billion is allocated to capital projects while N30.17 billion is proposed as recurrent expenditures. This budget, however, contains a deficit of N20.5 billion, which we intend to fund through borrowing.
Mr. Speaker, it is instructive to note that this administration has made deliberate efforts to reverse the disproportionate relationship between capital and recurrent expenditures, which was in the past skewed in favour of recurrent spending. The cumulative effect of deploying more funds into general administration and recurrent expenditures is that public finance management had over the years been consumptionist rather than developmental. The backbone of the 2009 budget is capital projects. This is why we have allocated 60% of the total budget towards capital expenditures.
Mr. Speaker, I will now outline the capital projects for the 2009 fiscal year and share with you this administration’s rationale:
6. Capital Projects
In this fiscal year, we intend to take bold and decisive steps to improve the quality of our roads, which are death traps and a nightmare to motorists and commuters. All over the world, the quality of roads positively affects the standards of living of the people. Good quality roads reduce maintenance costs on vehicles, enable commercial operators to charge reasonable fares, reduce repetitive stress and allow citizens more time for productive activities. Therefore, we have allocated N14.60 billion to roads and N10.70 billion to drainage, erosion ‘and flooding control mainly in Benin City this fiscal year. The road construction projects will be integrated with efforts to address the flooding challenge and generally beautify the city. These substantial allocations to roads, drainages and beautification constitute part of a broader strategy of gradually but steadily transforming our capital city into a 21st century metropolis.
We believe that this investment in the transformation of Benin City is justified in the first budget year. More than any other city in the state, Benin increasingly absorbs a heavy population from rural and provincial centres, in and outside Edo State, which continues to exert enormous pressure on infrastructures.
Mr. Speaker, the road projects to be executed will be durable, aesthetically appealing, functional and capable of enduring future population expansion and increased vehicular traffic. For instance, the Airport Road and the Ugbowo Road will be expanded to six lanes, complete with streetlights, drainages, sidewalks and other features of a durable modern highway. To guarantee the attainment of these high technical specifications, Government will mobilise capable and reputable contractors.
However, even as we concentrate on Benin this fiscal year, this administration has allocated funds to some road projects in the other Senatorial Districts. These details are provided in the main budget document, which I will present to Mr. Speaker shortly.
In addition, we have provided funds for the establishment of a Public Works Agency. This agency will execute repairs of failed surfaces as they develop and keep our highways in motorable conditions all the year round. The agency will be responsible for sanitation, traffic management, beautification, enforcement of environmental laws and urban renewal in general.
6.2. The Flooding and Drainage Challenge
The flooding and erosion challenge in Benin City is formidable indeed, which explains the substantial allocation we have made this year. This will enable us to mobilise reputable contractors to the most critical sites, to clear blocked channels and construct new ones.
In addition, Government will evolve tough measures to deal with the abuse of town planning, land use and environmental laws. We have to take painful but necessary measures to demolish houses erected on the moat and other natural drainage paths.
Mr. Speaker, the next major area of focus this fiscal year is primary and post-primary education, which attracts over N5 billion. To arrest the systemic decay in our school system requires massive investments on infrastructures in the short term. Our contract with Edo people in the area of education is that we must give our children the quality of education that will ultimately enable them to break out of the poverty cycle. Consistent with our resolve to reform the public school system, we will embark on the construction and furnishing of new standard classrooms in the 18 local governments. Funds have also been allocated to commence the establishment of a model primary and secondary school in each local government area and two in Oredo local government area. The administration will rehabilitate and furnish existing classrooms all over the state.
From this amount, Government will equip and reinvent the inspectorate arm of the Ministry of Education in our quest to improve standards in the public schools on a sustained basis.
Another N1 billion has been set aside for some of the capital requirements of the Ambrose Ali University. This is in addition to the allocations for capital projects in the other state-owned higher institutions. In the course of the year, we will finalise discussions with the authorities, staff and students of these higher institutions on how to deal with their capital requirements on a holistic basis in subsequent budget years.
The total allocation to education, therefore, is N6.5 billion, which is more than a 300% increase over the preceding year.
Mr. Speaker, this administration is determined to give effect to our commitment to provide quality curative and preventive care in order to improve the health status of our population. This year, Government will commence with the comprehensive rehabilitation of the Central Hospitals in Auchi, Benin City and Uromi.
As in other sectors, the severity of the crisis in the healthcare delivery system cannot be tackled in one budget year. However, we believe that with the allocation of N1.74 this year, we shall make substantial impact that can be built on in the subsequent fiscal dispensations.
This administration will continue to make efforts to guarantee the security of lives and property. In this respect, we will continue to support the Edo State Police with the means to combat crime.
Furthermore, Government is currently engaging the leadership of the Edo State Police Command on operational modalities for the establishment of a rapid intervention squad.
The security challenge requires partnership with the private sector. Therefore, this administration will launch the Edo State Security Trust Fund which will be jointly managed by Government and the
Mr. Speaker, a fundamental element of our security strategy is the mass employment programme, for which provision has been made in the budget. Even our security chiefs in the State Security Council fully agree with me that the most viable and sustainable means to fight crime is secured employment for the mass of our people, especially the youths.
6.6. Administration of Justice
Mr. Speaker, if we must guarantee access to justice and truly promote the rule of law, the challenge is to give infrastructural empowerment to the judiciary. This administration will commence this process this fiscal year with the renovation of the State high court complex in Benin, renovation of magistrate courts all over the state and construction of some quarters for judges and magistrates.
6.6. Mass Transit
Mr. Speaker, we are determined to adopt a new and more effective approach to dealing with the urban transportation challenge. Government has provided counterpart funding towards the acquisition of some big buses for intra-city operations. The rationale for the procurement of these buses is to ensure the effective and easy mobility of passengers and goods, reduce wastage of commuters’ time and address the horrifying traffic bottlenecks, especially in the city centres. Thus, the Edo City Transport Services will be re-engineered and re-focused to provide effective intra-city service, which was the original mandate. We will also explore the possibilities of merging the Edo line and ECTS.
An immediate challenge is to eliminate the blockade and congestion of our highways. I am renewing my appeal to traders to vacate the roads and the walkways, while mini-buses, cabs and okadas should refrain from operating parks in areas not designated for that purpose. Our roads and walkways are not meant to be markets, motor-parks, mechanic workshops or places for abandoning unserviceable vehicles.
With effect from this quarter, traffic marshals and mobile courts will be deployed to sanitise our highways. Government has allocated funds to procure towing vehicles, vehicle scrap crushers and related capital equipment for this purpose.
6.7. Agriculture !.-
Government has set aside NO.39 billion to strengthen the capacity of the ADP to deliver support to farmers and procure tractors and other agricultural equipment. A major programme to be funded in the sector is the replanting of the Urhonigbe Rubber Plantation. Above all, we will encourage and partner with private investors in the area of large-scale mechanised agriculture, through the provision of land and counterpart funding where necessary.
This administration recognises that without providing our rural communities with electricity, we cannot deliver on our vision to promote cottage industry, raise rural income and improve the quality ofrural life. With an allocation of NO.81 billion this fiscal year, Government will develop infrastructures that will link about 50 rural communities to electricity supply.
The sum of N1.1 billion will be allocated to some ongoing water schemes including the Benin City Water Improvement Project, Ojirami Dam Improvement Work, Iyagun Headwork, and rehabilitation of the Ugbalo/lbore Water Supply Surface Scheme. Government will also sink boreholes in many communities, so that we can raise the levels of sanitation and combat water-borne diseases in the 18 local governments.
Mr. Speaker, in the area of sports, N100 million has been allocated for capital projects in the Michael Imoudu College of Physical Education, Afuze, in order to commence its restoration as the premier training institute for sportsmen and women. The sports development budget also covers the rehabilitation of Dr Samuel Ogbemudia Stadium. The restoration and equipment of the other stadia will be executed in subsequent fiscal years.
6.9. Commerce and Industry
Through the Ministry of Commerce and Industry, Government will disburse fund to micro-credit schemes to empower small and medium enterprises and cooperatives. This is consistent with the administration’s objective of stimulating productive activities and promoting self-employment. Government will also explore the re-capitalisation of some of the ailing public enterprises through partnership with the private sector.
6.10. General Administration
Mr. Speaker, in order to function with optimum effectiveness in the implementation of public policies, this government is committed to improving level of performance, competence and commitment of the public service in Edo State. This fiscal year, Government will ease the office accommodation crisis by completing the C and D Blocks in the State Secretariat as a starting point. This is in addition to the provision of vehicles, office equipment and internet-connected computers. In our recurrent budget, provision has been made for training, retreats and similar capacity-development programmes to boost the performance of the public service.
6.11. Other Sectors
Mr. Speaker, the provision for capital projects in the other sectors are as follows:
- Arts, culture and tourism - N178.36 million
- Information - N264.10 million
- Land and Survey - N260.20 million
- Women Affairs & Social Development - N450. million
- Oil Producing Areas Development - N604 million
7. Implementation Strategies
Although, our budget of N75.54 billion is N1.84 billion less than the preceding year, we will adopt creative strategies to ensure greater performance and attain much better value for the money expended.
7.1. Performance in Meeting IGR Target
The performance of this budget is predicated largely on the attainment of the high Internally Generated Revenue target of N15 billion. In furtherance of meeting the target, this administration will overhaul the IGR machinery. I will personally take charge of this process.
The reality today is that we cannot meet our needs by depending on the Federation Accounts, which is itself under-performing because of the steady decline in oil revenues. Indeed, the growing use of bio fuels and the aggressive research into alternative energy sources in the world will invariably result in less demand for oil, and ultimately less income for mono-cultural economies like Nigeria.
Progressive development thinking requires that we plan ahead and upscale internal generation of revenues, especially taxes, levies and charges for services. This process will commence this fiscal year and I appeal for the support and cooperation of corporate and individual citizens.
7.2. Dilequent Implementation and Fiscal Governance.
This budget will be operated based on the strict application of the principles of accountability, fiscal responsibility, probity and value for money. We will intensify measures to block the vast leakages caused by over-invoicing of contracts and procurements, and outright theft of public funds, as we have established through the Assets Verification Committee.
Towards enforcing these principles, government will operate a Due Process and a Project Monitoring Unit to ensure that all projects are executed at reasonable costs in accordance with prescribed quality specifications. I believe that with these controls, coupled with public vigilance and your ove~sight scrutiny, we will give effect to our collective determination to ensure value for money.
This administration will also commence the process of full computerisation of the operations of government in order to enhance capacity to plan. This will also eliminate wastages and fraud, especially in such areas as Salary and Pension administration, revenue collection, project monitoring and expenditure tracking.
7.3. Effective Oversight and Monitoring
Mr. Speaker, we will establish an Economic Team made up of a highly specialised pool of technical expertise beyond what is institutionally available. This team will provide critical and independent perspectives to guide the implementation of the budget and economic planning in general.
7.4. Popular Participation
While Government will rely on experts, the ultimate advisers will be the people. In executing this budget, we will use the tools of popular consultation and popular participation to ensure that the people remain part of every step that government takes. In furtherance of involving the people in the implementation of the budget, there will be regular town hall meetings and sectoral engagements with stakeholders in the 18 Local Government Areas.
7.5. Building Partnerships
This administration will continue to work in partnership with Mr. President and the relevant agencies of the Federal Government towards the successful implementation of the budget. As I have acknowledged before, Mr. President has been supportive of our development aspirations in Edo State. We will deepen this synergy between the Federal Government and the Edo State Government for the economic development of our state and the overall prosperity of our nation.
We recognise that government alone cannot bear all the burden of financing development, especially with the current inauspicious economic scenario. Therefore, we need partnerships with the private sector and fresh investments in the State. I wish to assure the private sector and new investors of the administration’s readiness to provide appropriate incentives, including counterpart funding.
Let me also assure the International Development Community of our readiness for constructive partnerships in our priority areas and in meeting the targets of the Millennium Development Goals. with the reforms in fiscal governance, which we have initiated in Edo State, there will be better value and greater output for development assistance.
In the final analysis, the successful implementation of this budget lies in the effective engagement with the people. I am convinced that our people have what it takes to transform Edo State and make it a positive reference point for people-oriented governance. But Mr. Speaker, in this transformative process, leadership is critical. Our duty to the people is to provide creative and committed leadership that will inspire the people to unleash their creative energies, will and resourcefulness. Ultimately, the resourcefulness and energies of the people remain the major catalyst for development.
As leaders of both the Executive and Legislative arms of government, we have a duty to share the burden of finding solutions to the problems that confront our people. We have to set aside political and other differences, provide purposeful stewardship to the people and give them hope in a new and better Edo State. In this regard, all arms of government will have to make severe sacrifices particularly in the areas of overhead expenditures in the light of dwindling resources.
I am conscious of the heroic sacrifices and efforts that Edo people invested in bringing about change in Edo State. We will not betray the trust, confidence and support of the people. We will do everything that is humanly possible to meet the aspirations and collective expectations of our people, to ensure that we do the greatest good for the greatest number of people in the shortest possible time.
I wish to appeal for your patience and understanding, especially in relation to the bad roads and floods in Benin. In order to get the best value from our expenditures on roads and drainage in Benin, we must holistically revisit the master-plan. This will naturally take some time. Thus, the reality is that not much can be done before onset of the rainy season. However, when are done with this holistic approach, flooding and erosion in Benin would have been eradicated before the next rainy season.
At this point, allow me, Mr. Speaker, to express my appreciation to you and your colleagues once again for your partnership. I wish to thank His Majesty, the Oba of Benin, for remaining a source of moral stability and rectitude in our State. We thank our other royal fathers, religious, community and opinion leaders for the support, prayers, encouragement and advice.
I wish to salute the sacrifices made by Organised Labour, professional bodies, the market traders and self-employed, okada riders, transporters, farmers, students and youth, civil society organisations and pensioners.
Mr. Speaker, it is now my honour and pleasure to present for your deliberation and adoption the 2009 Budget Estimates for Edo State, our Budget of a New Beginning. I thank you for your attention.
Now our duty here as Edo people is to monitor the effective implementation of this budget, especially when it gets passed by the State House Of Assembly. This budget, according to the Governor is intended to bring about a new beginning for the Edo people, let us all join hands to make this a reality.