It is no longer news that the fear of the unknown is occasioned by the dwindling fortune of oil in International market, Nigeria’s major economic backbone which is now below $38 per barrel in the world market. But what is yet to be seen is how the Federal Government of Nigeria and the 36 states will weather/wade the storm in the new financial year.
Already, the Federal Government has disclosed that it is going for foreign loan to finance its 2016 budget, though it has opted for the loan which is about N1.8 trillion. For some states, which has been plunged into unprecedented debt by previous administrations, which may not be an option for some states to go for loan to finance those activities of its government.
In Ogun State, at least, the signs of what’s to come have begun to manifest. The ray of hope appeared on the horizon on Tuesday, 24th November, 2015 when the state governor, Senator Ibikunle Amosun, presented the 2016 Budget to the state House of Assembly. To say the least, it is obvious that the Ogun State Government did not deceive itself over what the financial environment would look like in 2016. For a state to embark upon its completion of major massive roads construction and markets in the state especially, for the preparation of celebrating its 40 years anniversary which comes up on February this year precisely.
Thus, Governor Ibikunle Amosun, working closely with appropriate committees of the House of Assembly in preparing the budget, this show that he did not set out to deceive the people of the state. The budget, christened ‘’Budget of Optimisation’’, has a total estimate of N200.27 billion which fell short of the N10. 2 billion of 2015 budget. While some states might have considered the usual bogus budget estimate that characterised the past years when petrodollar flowed like rain water.
Governor Amosun chose not to play to the gallery; Ogun State is one of those states in the country where the culture of paying tax is taboo and almost alien to the people. The government has looked inwards and think out of the box to satisfy its people. The contents of the 2016 Appropriation Bill clearly show that this is exactly what the Amosun-led administration has done.
Among the objectives of the budget were; Diversification of the economy from Federation Account Allocation-dependent to exploitation of our natural endowments and widening our tax base for the socio-economic development of our dear state and exploitation of raw materials (solid minerals); no pay cut or retrenchment of workers; prompt payment of workers’ salaries, pensions and gratuities of our retired senior citizens; aggressive IGR drive; radical approach to reducing the level of poverty among the citizenry through provision of conducive environment for job creation and wooing of investors from foreign country to the state by conveying investors forum; completion of on-going capital projects for the celebration of 40 years of existence of Ogun State; effective supervision and monitoring of all government capital projects in the state to enable government get value to tax payers’ money and on funds expended on projects, development of agriculture so as to ensure provision of enabling environment for food security and growth of agro-based industries with immense private sector participation, among others.
Ogun State government knows that it is imperative that growth and development in the state is inclusive and the connectedness of our local government will be covered in this initiative. Some other initiatives undertaken by the present administration in last year includes; over 100 roads rehabilitated and upgraded across the three senatorial districts and new ones opened up. But in line with the industrial plan of the state, some areas around Old Abeokuta-Lagos Road, Lagos-Ibadan Expressway, Sagamu-Ogijo axis, Papalanto interchange axis and Ota-Agbara axis have been designated as industrial clusters for prospective investors.
Also attractive incentives are being offered to investors wishing to acquire land for business, with these incentives over 70 industries have been established in Ogun State since investment drive commenced in 2011, and combined capacity of these companies has generated over 300,000 jobs for our teeming youths in the state. And signing of a Memorandum of Understanding, MOU, with a private developer to provide 330 housing units of two and three bedroom bungalows units as well as duplex apartments at the Kemta/Idi-Aba Estate, Abeokuta.
With these lofty ideas and objectives, Amosun explained in his budget speech that ‘’considering the limited resources at our disposal and in order to keep the economy growing and restore the tempo of sustainable development, we have proposed a budget size of N200.27 billion (N200, 274, 453, 352) for the 2016 financial year. This represents a moderate reduction of 4.79 percent compared with the 2015 budget”.
‘’Twenty point ninety seven percent (20.97 percent) of the budget would be funded by the revenue from the Federal Allocation Accounts, while the Internally Generated Revenue, IGR, is expected to fund 53.93 percent of the budget. Furthermore, while external loans and Grant are 20.11 percent and 4.99 percent respectively’’.
The governor further disclosed that N 99. 29 billion (49.6%) was earmarked for Capital Expenditure, while N 100. 98 billion (50.4%) would be expected on recurrent expenditure. He added that personnel cost made up of Salaries and Allowance of N61.34 billion and pension and gratuities of N11 billion account for 36.1% of total recurrent expenditure while balance of 14.3% (N28.6 billion) will be set aside as overhead cost.
The speedy action of the state House of Assembly in the process of turning the document to law by the quick passage of the Bill attested to the claim by Governor Ibikunle Amosun that Assembly were carried along from the conception stages of the Appropriation Bill. Little wonder the Speaker of the House, Right Honourable Suraj Ishola Adekunbi, commented that all the details of the budget were known to members of the House of Assembly, saying that it was designed to place the people of the state on a vantage financial pedestal, despite the paucity of funds facing states of the nation.
It is our prayer that the desire of the current administration in the state not to give the people false sense of financial security will translate to expected results and that the people key into the current economic realities for government to serve them better, and it is our collective responsibility to wish the Governor, House of Assembly Members, Cabinets Members, Civil Servants, Public Servants and the citizens of the state for the well-deserved ‘’Budget of Optimisation’’ and best of this wonderful glorious 40th year celebration comes up on February this year and safe landing in the re-building mission, plan in Ogun State.
Orunbon, a political analyst writes from Abeokuta, Ogun State. ([email protected] 08034493944, 08029301122)