PROTOCOL
Let me state, from the outset, that despite the obligatory demand which necessitates that I stand before you to perform this very important assignment, it is always my pleasure to be in this hallowed chamber to interact with the representatives of the good people of our dear State.
My job this morning, Mr. Speaker and other members of the House, is to present the proposed 2018 Budget. This is, as we are all aware, the first since the trust reposed in us to serve the people of this State to the best of our ability. Therefore, the palpable excitement is justifiable.
Consequently, I crave the indulgence of the principal officers and members of the House, party leaders and citizens of Ondo State, to permit certain latitude in the manner of presenting this very important document. I consider this intervention extremely useful at this crucial moment in our State.
This Administration, sincerely, solicits the continued understanding of our good people in the face of the challenges currently experienced by all due to paucity of funds. There has been no significant shift in the situation since we assumed office. It is with utmost confidence that I present this current budget to the House for realistic scrutiny and eventual approval.
I have no doubt at all that Honourable Members will treat this document as expeditiously as possible. My hope is not anchored on what may be mistakenly construed as mere flattery, a pastime of politicians while seeking a favour. I have as evidence the ingenuity which the current leadership has brought to bear on legislative duties and the attendant results already achieved within a short spate of time. It is on record that all the Public Financial Management laws, which were pending for six years, were passed into law timeously. Therefore, the hope that this Appropriation Bill will receive the required attention is not misplaced.
Extremely conscious of the expectations of our dear people concerning the activities of the Administration since inception, I proceed to present a budget which represents a proximate reflection of the collective aspirations of the people, having consulted widely with a view to incorporating the input of all stakeholders. Even a cursory glance at the pages of this fiscal document readily reveals the fact that it captures the essence of this Administration’s Blueprint.
We will be insistent on reducing our near-absolute dependence on revenue allocation from the Federal Government. We cannot over-emphasise the obvious fact that our space within the federation is special. Our ground carries within its belly unimaginable riches which remain untapped. We possess the capacity to build a virile economy through Agriculture, Solid Minerals, Trade and Tourism. Commerce and Industry will receive serious attention.
We shall be pursuing a programme of activities which will, ultimately, encourage productivity and create real opportunities for our people in the next fiscal year. Our sustained efforts will create wealth for our people. Those who preceded us before the incursion of the military into our politics achieved this feat. Therefore, we do not suffer from lack of tradition when a striking example becomes compelling. Our State inherited a template of performance in virtually all sectors. There can be no justifiable reason for the option to be immersed in crass consumerism with the attendant poverty. We will mobilise our people to create wealth.
PERFORMANCE OF THE 2017 BUDGET
Mr. Speaker, Honourable members, you will recall that the Nigerian economy slipped into recession in 2016 and this dragged into 2017. Similarly, the price of crude oil was low, hovering around $48 per barrel and consequently reduced the revenue accruing to the Federation from the sale of crude oil.
However, the Nigerian economy has started to improve in terms of performance of the key macro-economic indicators despite the economic challenges that characterised the opening months of the 2017 fiscal year. With the growth in GDP at 0.55% in the second quarter of 2017, the economy has statistically moved out of recession, while other economic indicators like the inflation rate, has been improving since February 2017, thus enhancing the real value of money. In a related development, the major source of revenue for the nation, crude oil, recorded its highest performance in over two years at about $60 per barrel. The foregoing development provided rays of hope that the Economic Growth and Recovery Plan of the Federal Government are yielding the desired results.
Mr. Speaker, Honourable Members, you will recall that on assumption of office in February 2017, the budget proposal before this esteemed House as submitted by the last administration was reworked in order to accommodate the aspirations of this administration. At the end of the exercise, a budget size of N170.847 billion was appropriated for the State in 2017 with a corresponding amount as revenue. The breakdown of this figure, on the expenditure side, shows that N8.127 billion was allocated for Debt Repayment (Principal), N8.374 billion for Statutory Transfer, N95.159 billion for Recurrent Expenditure and N59.187 billion for Capital Expenditure.
Total receipts from all sources as at October, 2017 stood at N78.517 billion as against the expected sum of N143.405 billion for that period. This represents 55% performance. Of this amount, the Independent Revenue recorded N8.971 billion out of N12.303 billion projected for the period. In effect, Independent Revenue only accounts for 11% of the total revenue received for the period. The below performance of revenue invariably affected the level of implementation of the 2017 budget.
Mr. Speaker, in spite of the poor revenue performance, this administration has continued to prioritise the welfare of its workforce through the regular payment of salaries and pension as they fall due. You will recall that before the advent of this administration, salary and pension payment was unpredictable thus impoverishing the workers, with several months’ salary and pension arrears inherited from the last administration. Not only have we ensured regular payment of salary and pension to date, we have also paid three months out of the six months backlog inherited. We are deeply committed and ready to offset the remaining salary and pension arrears the moment there is a significant improvement in revenue.
The performance of expenditure is a function of the revenue performance and the structural rigidities associated with some classes of expenditure. As earlier noted, personnel related costs are first line charges irrespective of the level of revenue in-flow; and given the size of personnel costs, this leaves little for capital expenditure. As at the end of October, 2017, a total of N10.721billion or 15.31% of actual expenditure was expended on debt repayment and a total of N51.007 billion or 73% of actual expenditure was on recurrent expenditure. In the same vein, a total of N6.126 billion or 8.75% was spent on capital development while a total of N2.157 billion or 3.08% was released to OSOPADEC as statutory transfer.
