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Breaking! Obiano Presents N101Bn Budget For 2016, Only N5Bn For Education And Health, N48Bn For Salaries, Else

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Simonateba.com will do an analysis of the budget but for now here are the highlights of the 2016 Budget in Anambra.

Budget: N101.4bn.

This represents a significant decrease of 38% over the current fiscal year’s budget estimate.

Capital Expenditure is projected at N52.8bn while Recurrent Expenditure will be N48.6bn. 

These figures imply a Capital to Recurrent Expenditure ratio of 52:48 as against 67:33 in the current year.

Works & Infrastructure – N30.0 billion;

·        Education – N3.0 billion;
·        Health – N2.45 billion;
·        Public Utilities – N1.8 billion; and
·        Agriculture (Rural Development) – N1.02 billion.

 

A BUDGET SPEECH DELIVERED BY HIS EXCELLENCY, CHIEF WILLIE OBIANO, GOVERNOR OF ANAMBRA STATE TO THE HONOURABLE MEMBERS OF THE ANAMBRA STATE HOUSE OF ASSEMBLY ON THURSDAY, 03 DECEMBER 2015.
1.       I feel greatly honoured to stand before this great Assembly today, to present to you my administration’s Draft Estimate and Roadmap for the 2016 Fiscal Year. The outgoing year 2015 remains one of Nigeria’s most difficult years in recent memory, but I am proud to report here that even in the midst of all the extremities, my administration kept faith with Ndi Anambra. We have faithfully implemented our 2015 budget, titled- ‘Budget for Wealth Creation and Social Cohesion’.

2.       Madam Speaker and Honourable Members, the 2015 Budget offered my Team and I, a chance to do the fundamental spadework for the full implementation of my Economic Blueprint and my Promise to Ndi Anambra.

3.       Madam Speaker and Honourable Members, any useful appraisal of my administration must of necessity start with a timely reminder of my Vision and Mission Statements which form the very core of my pact with our people. As you may well recall, when I campaigned for the votes that made me the governor of this great state, I clearly stated that my Vision was to make Anambra State the 1st Choice Investment Destination and a hub for industrialization and commercial activities.

4.       I also declared that my Mission was to make Anambra State a socially stable, business-friendly environment that would attract both indigenes and foreigners to seek wealth-creating opportunities. These two statements have served as a compass to my administration from inception. I am delighted to report that we did not stray from this compass in the out-going year.

REVIEW OF 2015 FISCAL YEAR

5.       Madam Speaker, Honourable Members, no meaningful assessment of the performance of my administration in the last fiscal year can be done in isolation from the nation’s macro-economic environment. In this instance, the political environment is also of great importance as the year in review is an electoral year. Frankly, the year 2015 presented some of the most difficult challenges that Nigeria has known in recent times.

6.       Nonetheless, it also offered the nation a great chance to work on true integration and rebirth with a most peaceful transition from one civilian regime to another, as the party in power peacefully handed over to the opposition. The build up to the last general elections was marked by fear and apprehension, rooted in our political history. Most Nigerians waited with anxiety for the outcome of the political battle between the party in power and the opposition. Consequently, this had a telling effect on the market at first, but happily, it dramatically recovered with the emergence of Muhammadu Buhari as the winner of the presidential elections.

7.       As we all know, the unprecedented crash in the price of crude oil in the international markets combined with the relentless onslaught by the Boko Haram in the North East and parts of the North Central to create a sense of anxiety in our country. A direct consequence of the fall in oil prices is a staggering loss of revenue from the Federation Account as monthly FAAC took a 40% hit between March, 2014 and October, 2015. The immediate result of this is a drastic dip in the capacity of most states to meet their financial obligations leading to non-payment of salaries and the frantic search for bailouts. Thankfully, Anambra is not a part of this category and will never be one of the states begging for bailout funds under my watch.

8.       However, we are not totally insulated from the prevailing economic shock in the country. A drop in federal revenues means that we have had to look inwards for growth and sustainability. It means that we have had to rev up our revenue drive from the N500m we inherited monthly to a current level of N1.3bn. It also means that now more than ever before, we have had to prioritize government spending to ensure that we have maximum values for minimum investment. It was this thinking that gave rise to the new mantra of my administration known as “doing more with less.”

9.       An easily noticeable sign of the impact of the current revenue loss is the fact that across the country, there is a lull in the construction industry as states slow down on capital projects. Happily again, our story is different in Anambra. The three flyovers in the three strategic locations in Awka are nearing completion while work continues at a considerable pace on other roads and bridges, including the 47 kilometre road and bridge to the oil and gas fields in Anambra East. Ndi b’anyi, I will have you know that this is the longest road project embarked on by any administration in Anambra!

10.     Great parliamentarians, we all know that since the inauguration of my administration, one of our proudest achievements is the transformation of Anambra State from the centre of crime and criminality to the status of the safest state in Nigeria. Indeed, from the end of the Civil War, Upper Iweka and all the areas stretching to 10km radius were notorious for violent crime of all types. But in the year in review, we gave kidnappers and violent criminals a bloody nose; pulling down the warehouses where kidnappers kept their human cargoes and running them out of town.

11.     We also made a strong statement when we arrested Alphonsus Ngwu, the largest dealer on illicit arms in Onitsha and Okechukwu Nnaegbo, a kidnap kingpin who was already inside an aircraft trying to escape to South Africa. To further reinforce our security, we organized a Regional Security Conference that attracted the governors of the South Eastern states and Delta State. We shall not relent in reaching out to our neighbours and building critical alliances that will keep Anambra State beyond the reach of violent criminals.

12.     Great lawmakers, the emerging narrative of the New Anambra is a story of hope as we shrugged of the depression caused by the parlous state of the economy to give hope to our people with a 15% increase in workers’ salaries. No other state in Nigeria seriously contemplated a salary increase for workers; not even the wealthiest states could do that. But we did not only increase salaries, we have continued to pay salaries regularly and by the grace of God, we shall continue to do that. We also evolved a string of worker-friendly policies that changed the face of governance in Anambra State. We are on record for clearing the N1.9bn arears of salaries owed the state Water Corporation Staff as well as the approximately N1bn pension to local government retirees. Indeed, my administration has humanized governance and assumed the remarkable status of “the human face of governance.” This became more evident nationally when 25 prisoners serving different jail terms in Anambra State were granted amnesty and handed a cheque of N1m each to enable them re-possess their lives.

13.     Our outstanding achievements in the Educational Sector in the previous year were sustained in the year in review. We maintained our enviable position in NECO examinations by recording approximately 80% in 5 Credits including English Language and Mathematics in year 2015 while Anambra children from a few public schools represented Nigeria at the World Schools Debate Championship in Singapore. We are also current national champions in the national Pre-basic Debate Competition held in Abeokuta, Ogun State to mark Nigeria’s 55th Independence Anniversary. Similarly, our own Rose Nkemdilim Obi also won this year’s Teacher of the Year Award to underscore the silent revolution that is going on in the educational sector. But more specifically, we have disbursed the sum of N733 million to mission schools, renovated 862 units of 10-classroom blocks and awarded scholarships estimated at N30 million to over 200 students. We would have done more but for the bleak state of the economy.

14.     As most of you are now aware, contrary to the bogus figures that have been bandied around in the last 19 months, my administration inherited the sum of N36bn in liquid assets from the previous administration and a portfolio of legacy projects of N107bn. However, in line with our Promise of Continuity, we have so far paid the sum of N35.1bn on all projects we inherited from the last administration and N11.7bn on projects so far initiated by my administration.

15.     The drive for investment received a huge boost in the out-going year, beginning with the arrival of a 28-man Trade Delegation from Thailand in January. Even with the bleak domestic economy, we were able to sustain the push for more investments, leading to the eventual visit of the Irish Trade Mission and finally the visit of the UK Trade Mission one week ago. At the same time, our beloved state has maintained its status as a haven for investors in Sub-Saharan Africa, attracting massive investments to the tune of $2.5bn in 19 months. Anambra ranks only next to Lagos and Ogun States in investment inflow and with our current rating as Nigeria’s safest state; we have enough fundamentals to do better than we have done so far. As the true home of entrepreneurship in Sub-Saharan Africa, leveraging our rich database of Captains of Industry, we shall continue to aggressively facilitate more investments until our entire state is saturated with flourishing businesses.

16.     Ndi Anambra, I must mention the fact that much of what we have been able to achieve in our drive for investments is as a result of the pivotal role of the Anambra State Investment Promotion and Protection Agency (ANSIPPA). ANSIPPA continues to create a new paradigm in investor relations in the public sector, wiping out the intimidating bureaucracy that once made investing in Nigeria a nightmare and cutting down the cost of doing business in Anambra State. ANSIPPA has made Anambra the most sought-after investment destination in barely 18 months.

THE 2016 BUDGET (Overarching Considerations)
17.     Madame Speaker and Honourable members, as I mentioned earlier, the current economic recession in the country presents some challenges which have direct implications for the 2016 budget. Therefore, in line with the dynamics of these trying times, we have made a careful assessment of all activities as well as difficult trade-offs to ensure that only the most critical activities are included in the budget. We must also ensure that we derive maximum socio-economic value from every naira expended by my administration. It was this consideration that informed the choice of the theme of the 2016 budget proposal as “the Budget for Efficiency, Optimization, Productivity and Job Creation.”

Great Parliamentarians, experience has shown that every realistic budget proposal must anticipate some challenges that might stand in the way of its full realization. Consequently, the challenges that our Budget of Efficiency, Optimization, Productivity and Job Creation must overcome include:

·        Limited Resources: Declining oil revenues which have significantly impacted FAAC receipts accruing to States and Local Governments.

·        Large Portfolio of Legacy Projects & 4Cs: We inherited a large portfolio of projects from my predecessor but in line with our Continuity Promise, my administration is committed to continuing, completing and commissioning all inherited projects and commencing new ones.

·        Strategic priorities: We have a bold ambition and a highly engaged citizenry looking for us to reaffirm their high expectations of developmental projects ahead of the next electoral cycle. It does not matter that the federal government has repeatedly admitted that Nigeria is going through some financial difficulties that might stand in the way of fulfilling some electoral promises.

Policy Thrust of Fiscal Year 2016 (FY2016) Budget
19.     Madame Speaker and Honourable Members, our policy thrust for the fiscal year 2016 budget is to implement economic policies and sector growth strategies that will achieve fiscal stability and discipline, grow and maximize internally generated revenues, improve productivity in public service productivity  with a view to engender inclusive economic growth, sustainable development and job creation for Ndi Anambra.

20.     The guiding principles and strategies for attaining these objectives are stated below:

a.     For the 1st time in the history of Anambra State, we have to set up a mechanism to ensure that our revenue estimates are scientifically computed with accurate, realistic and defendable assumptions.

b.    Aggressively drive the elimination of revenue leakages via automation, heightened & targeted enforcement and instituting strong governance controls across all revenue generating ministries, departments and agencies.

c.      Strategic budgetary priority on human and infrastructural development with emphasis on select economic enablers, namely: i) Security, ii) Road construction and maintenance, iii) Education, iv) Healthcare, v) Water, Sanitation & Hygiene, vi) Environment and vii) Youth Empowerment.

d.    Sustain government counterpart contributions with Development Partners (such as UN Agencies, World Bank, EU, etc.) to attract greater funding support to our key social sectors.

e.     Refocusing and reorientation of our Economic Pillars (Agriculture, Oil & Gas, Industrialization and Trade & Commerce) to focus on revenue maximization and leveraging public-private-partnerships to implement medium-term sector strategies.

f.       Inclusion of a limited number of new, but strategically necessary, capital expenditure items not included in the unimplemented portion of the current fiscal year’s budget.

g.     Strong emphasis on MDA(s) budgetary allocation efficiency by ensuring value for money, through prioritization as highlighted by the Zero-Based Budgeting System.

h.    Creation of a Fiscal Responsibility Committee to act as a clearing house for all budgetary requests to ensure policy coordination, effective sectoral spending and efficient settlement systems.

i.       Sustained Implementation of the Treasury Single Account initiative to improve accountability and transparency. All MDAs to operate only one account through which overheads and other minor non-capital expenditure funds will be warehoused. All other funds to be warehoused centrally in the State’s treasury to enhance revenue collection, reporting and remittances.

FY2016 Supporting Assumptions
21.     The 2016 Budget is anchored on the following assumptions:
a.     Given the sharp drop in global oil prices and price forecasts by reputable financial institutions, we have assumed a crude oil price benchmark of US$40.20/bbl and average production of 2m barrels per day;

b.    Due to a drop in consumption levels across the country as acknowledged by the proposed initiatives of the FIRS, we project the impact of the above to have a zero sum effect on VAT revenues, hence, we assumed VAT revenues equivalent to our 2015E monthly average of N743m;

c.      The current economic situation will pose major challenges towards the growth of our internally generated revenues. However, we strongly believe that the aggressive elimination of leakages will bring about N2.2bn in IGRs representing an 80% rise on current levels. However, it is important to state clearly that my administration will not increase taxes, rates and levies;

d.    We have projected N12bn in counterpart and concessionary funding from our development partners;

e.     Although the Federal Government acknowledges its obligations to Anambra State to the tune of N25bn for funds expended on Federal roads and infrastructure, we expect to receive at least N14.5bn in refunds from the Federal Government;

f.       We have also budgeted N10bn in domestic concessionary debt financing to fund capital expenditure;

g.     Personnel costs are projected to rise by 13% to N16.6bn due to scheduled promotions. It must be noted however that whereas my colleagues are either owing a huge backlog of salaries or currently undergoing extensive retrenchment exercise, my administration is rewarding hard work!

h.    Consolidated revenue fund charges are projected to rise by 50% to approximately N12.4bn. This increase is occasioned by the addition of monthly contributory pension remittances and the creation of a sinking fund to provide for pension of pensioners (pre-contributory pension scheme era), group life insurance and increased public debt charges.

i.       Our proposed capital expenditure estimate is focused on priority social sectors while we expect to leverage public-private-partnerships to develop the State’s key economic pillars.

FY2016 Budget Envelope
22.     In line with the above policy thrusts and supporting assumptions, we therefore propose a budget of N101.4bn. This represents a significant decrease of 38% over the current fiscal year’s budget estimate. This decrease further stresses the need for prioritization and ‘doing more with less’ in the 2016 fiscal year! In the coming fiscal year, Capital Expenditure is projected at N52.8bn while Recurrent Expenditure will be N48.6bn.  These figures imply a Capital to Recurrent Expenditure ratio of 52:48 as against 67:33 in the current year.

23.     Madame Speaker and Honourable Members, during the 2016 fisca year, this administration will be totally focused and committed to aggressive development of our Economic Pillars and Enablers. We shall continue to partner with the private sector to deliver on our economic objectives in the areas of Agriculture, Industry, Trade and Commerce and Oil & Gas. While our economic enablers will require a great deal of public sector financing and support; we shall not relent in this area. Some key budgetary allocations are as follows:
·        Works & Infrastructure – N30.0 billion;
·        Education – N3.0 billion;
·        Health – N2.45 billion;
·        Public Utilities – N1.8 billion; and
·        Agriculture (Rural Development) – N1.02 billion.

Priority Sectors
Works & Infrastructure
24.     Expenditure on our Road infrastructure continues to account for a significant proportion (57%) of the planned Capital Expenditure in the upcoming fiscal year 2016. This is due to a number of factors, namely: 1) the resolve to complete all on-going road contracts awarded by the last Administration, 2) to ensure that we keep to our promise of providing road infrastructure to further unlock the economic potentials of the State and 3) to fulfil our investment obligations with Public-Private-Partnerships to provide access roads and other enabling infrastructure across our economic pillars.

Education
25.     During the course of the 2016 fiscal year, our development strategy shall:
a.     Continue to focus on improvement of Students Learning Achievements in English, Mathematics, Igbo and the core sciences.

b.    Provide access to quality education to Anambra children and deployment of teachers to rural/hard-to-reach areas.

c.      Reposition Technical and Vocational Education (TVET) through the refurbishment of infrastructure and accreditation of courses in three model Government Technical Colleges in the three senatorial zones.

d.    Setup a functional and efficient Education management Information System (EMIS) structure and retool Science laboratories in Public Secondary Schools to a state-of-the-art level.

e.     Adequately equip and furnish Special Education Centres in the State through the provision of equipment and classrooms.
f.       Intensify the application of transparency and zero-tolerance of exam mal-practices in the conduct of exams in the State.

g.     Continue Capacity building and ICT training programmes for teachers and students.

h.    Grants and scholarships for excellent policy to indigent students shall remain a priority.

i.       Improve active participation in sports and academic competitions as it engenders the spirit of excellence.

j.       Create a quality assurance bureau to regulate activities within the sector and ensure adherence to global best practices

k.     Finalize and implement work-in-progress policies aimed at improving girl-child education across rural areas in the State

Health
26.     In the Health sector, my administration plans to:

a.     Implement the Universal Health Insurance Scheme to ensure affordable and easy access to healthcare services to all and sundry. This we hope to achieve by:
o   Passing Universal Insurance Law.
o   Implementation of the National Health Insurance Guidelines
o   Renovation and Equipping of at least two general hospitals in each Senatorial Zone to meet up with the requisite quality and hygiene standards for accreditation by the National Insurance Scheme.

b.    Strengthen Primary Healthcare delivery by introducing performance-based financing where healthcare providers are rewarded with financial incentives based on period assessment.

c.      Scale up the Mobile Ambulance and Emergency Services Scheme already started during the current year.

d.    Upgrade three General Hospitals, one in each senatorial zone to Specialist Hospitals to aid training of doctors and other health workers.

e.     Commence construction of a new school of nursing

f.       Establishment of Anambra State drug distribution channels to regulate the drugs market and prevent sale and distribution of fake and counterfeit drugs.

g.     Introduction of a Traditional Medicine Board to regulate the practice of Traditional Medicine in the state.
27: PUBLIC UTILITIES

h.     Water:
1)Rehabilitate existing water treatment plants in cities
2)Rehabilitate existing water boreholes in rural locations
3)Develop effective reticulation networks to distribute potable water produced from rehabilitated water treatment plants and boreholes

B)Power Generation & Distribution

1)Extend select distribution network points to improve electricity distribution in the state
2)Complete the installation of transformers across the state
3)Expand the establishment of power generation solutions in the state to increase power supply to critical sectors of the economy.

C)Captive Power (government parastatals and street lights)
Embedded generation through Enugu Disco
Alternative power generation solution (renewables)
Power Audit

D)Conduct a power audit to assess the state of power distribution infrastructure in the state, determine the current energy demand, as well as project future energy demand.
Youth Empowerment & Job Creation
28.     In the area of Youth Empowerment and Job Creation, we shall:
a.     Challenge our youths with training for self-employment that will aid individual fulfilment and communal growth. Currently, our job creation capacity has recorded over 100,000 placements in Civil Works, Agro ventures, Personal Care services and Computer technology sectors.

b.    Commence the use of the Federal Youth Centre facility at Mgbakwu and increase our intake at the College of Agriculture also at Mgbakwu

c.      Utilise our Vocation centres and Technical institutes for training and engagements in youth entrepreneurial programs.

29.     In furtherance of our goals in this direction, we have taken appropriate steps to change the name of the Ministry from Ministry of Youth and Sports Development to Ministry of Youth Entrepreneurship and Sports Development and have set complementary targets. We enjoin Ndi Anambra to step forward to partner with Government in varied aspects of this new direction both as resource persons and as mentors.

30.     Today, Anambra is home to 46% of the Micro, Small & Medium Enterprises (MSME) activities in Nigeria. It is also pertinent to note that this sector is the critical engine room for job creation and entrepreneurial activity in any developing economy. To date, through the Anambra State Small Business Agency, we have been able to empower SMEs via well-structured funding and capacity building programs to the tune of N1.0 billion. Over the next six months, we plan to roll out a N1.0 billion micro lending scheme to support small scale farmers, cottage industries and other players in the informal sector.

Science & Technology
31.     In line with the theme of doing more with less, this administration intends to deploy ICT to curtail leakages and enhance productivity. Specifically, ICT will be used to drive IGR and other Government activities. To this end, the Ministry of Science & Technology (through our newly created ICT department) is working assiduously to roll out our integrated ICT platform by the first quarter of the coming year.

CONCLUSION
32.     Madame Speaker and Honourable Members of this esteemed Assembly, my beloved Ndi Anambra, the Budget Proposal I lay before you today represents our continued drive for real, inclusive and sustainable growth for the wellbeing of our people.

33.     It is a budget that gives priority to our concerns for infrastructure, food security and human development. It is a Budget that introduces a series of innovations aimed at ensuring that our state successfully weathers the impending economic storms. I am strongly of the opinion that this 2016 Budget before you is a push in the right direction borne out of our well thought-out and articulated development policies.

34.     This budget captures the hopes and aspirations of every citizen of our great state. It belongs to the farmer in Ayamelum, the trader in Onitsha main market, the young entrepreneur in Mgbakwu, the elderly and the less privileged. Yes, we are faced with challenging economic conditions, but history suggests that times of adversity often give birth to boundless opportunities. My administration has a responsibility to transform these opportunities into real prosperity for all. I appeal for the assistance and understanding of the members of this great parliament to make this work… to grow our economy… to transform our dear State and create jobs, jobs, jobs for our teeming youth and the unemployed.

35.     Lastly, I must reiterate my appreciation of the great contributions and cooperation of this Legislature so far in discharging our collective responsibility to build the State of our dreams.

36.     I eagerly look forward to an expeditious consideration and passage of this Proposal, as we strive to continuously transform the fortunes of our great Anambra State … Light of the Nation!

God Bless Anambra State!
God Bless Nigeria!

Thank you.

Willie Obiano
Governor

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