unveiling the truth...

Rt. Hon. Speaker,

Honourable Members,

I am once again honoured to present to this esteemed House of Assembly, the 2013 State Budget Proposal. This budget reflects the collective determination of Government to address the challenges of creating jobs, ensuring peace and security, reducing poverty, building infrastructure and growing our economy. The budget sets us on a path that will neither be easy nor uncontested- hard work and difficult choices lie ahead. We have embarked on the long walk to economic freedom, we have put our hands on the plough and we would not relent, we must finish strong.

2.       Firstly, we must give thanks to God for his goodness especially for his intervention that has brought about some stability in our political space. We have also witnessed relative peace and harmony among
the different ethnic groups in the State, especially in the riverine areas which was once a theater of ethnic clashes and unrests. Peace and security, like we know are essential pre-requisites for sustainable development. The developmental milestone this administration has been able to record thus far was because of the relative peace we have experienced recently.

3.       Before I highlight the performance of the budget of 2012, permit me to use this opportunity to register my deep and heartfelt appreciation to this revered Assembly for their stabilizing influence on the politics of the State and also their oversight roles in the management of the State economy at all levels.

4.       The reality of the need for us to build a Delta beyond oil,Mr. Speaker,is becoming more evident by the day. In the past few months, our oil revenue receipt has dwindled drastically resulting in adopting stiffer financial measures. With the support of this Honourable House of Assembly, government is determined to pursue deliberate policies and programs of far reaching fiscal consolidation to reduce our deficit and domestic borrowing to more manageable levels. We have introduced measures to actualize thesepolicies and programs in 2013 fiscal year, both in the area of improved revenue collection, recurrent expenditure reduction and increasing the share of capital expenditure to aggregate spending in contrast with trend of the past years. To do otherwise, we would risk a sudden loss of confidence in our budgeting. Instead, we reinforce today our commitment to fiscal responsibility, not just this year, but in the years ahead.

5.       Mr. Speaker and honourable members, Delta State is being repositioned. I am glad to let you know that what we have embarked upon is a process which is unique to Delta State and Nigeria, in the sense that it is a self-evaluation process, not dictated by anybody, but by ourselves because at this point in time, there is shortage or inadequate accountability in the Nigerian governance. The Delta State Economic Dashboard we have recently put in place is like a traffic-like methodology where we look at all the sectors, the Ministries, Departments and Agencies and subject them to a rigorous level of scrutiny and come out periodically with a result on their performance. It also facilitates coordination, connecting the dots, and enables each MDA sees how they fit into the overall objectives of growing the economy. In addition, it will enable the Governor and other stakeholders with vested interest in Delta State’s economy know exactly what is happening within the State.

6.       Mr. Speaker, distinguished members of this House, permit me at this juncture, to proceed with a brief review of the performance of the 2012 budget.

COMPONENTS OF THE 2012 BUDGET

7.      In the 2012 fiscal year, a budget of N437.21bn (four hundred and thirty-seven billion, two hundred and ten million naira) was approved for the services of the State Government. The amount is made up of a recurrent expenditure budget of N180.84bn (one hundred and eighty billion, eight hundred and forty million naira) and a capital budget of N256.37bn(two hundred and fifty-six billion, three hundred and thirty seven million naira). The profile of the 2012 budget was as follows:

(A)   REVENUE

S/N               Sources                                    Approved Budget              2012%                    Appropriation

i                     Internally Generated Revenue      51,447,050,581                   11.77

ii                    Statutory Allocation Including      170,000,000,000                  38.88

Mineral   Rev.Derivation

iii                    Value Added Tax                            9,991,239,535                   2.29

iv                    Other Capital Receipts                 205,779,793,442                 47.07

Total                                                                437,218,083,558             100

(B)       EXPENDITURE

S/N             Details                                           Approved Budget           2012%                    Appropriation

i                   Recurrent Expenditure                     180,846,597,100                 41.36

ii                  Capital Expenditure                          256,371,486,458                58.64

Total                                              437,218,083,558             100



YEAR 2012 REVENUE BUDGET PERFORMANCE

(JANUARY 2012 TO SEPTEMBER 2012)


8.      The State Government, during the nine months of January to September, 2012, recorded a total revenue performance of N190.03bn (one hundred and ninety billion, three million naira), representing an overall performance of 57.95% over expected proportionate receipts ofN327.91bn.  Out of this amount, the sum of N137.89bn (one hundred and thirty-seven billion, eighty nine million naira) was received as Statutory Allocation from the Federation Account. The amount represents 108.15% performance of the proportionate estimate of N127.5bn (one hundred and twenty seven billion, five hundred million naira).  On the other hand, the sum of N7.44bn (seven billion, four hundred and forty million naira) was recorded as receipts from Value Added Tax (VAT) out of the proportionate projected receipts of N7.49bn (seven billion, four hundred and ninety million naira) representing a budget performance of 99.40%.

9.       The sum of N34.58bn (thirty-four billion, five hundred and eighty million naira) was recorded as Internally Generated Revenue (IGR) out of the projected revenue of N38.58bn(thirty-eighty billion, five hundred and eighty million naira), representing a budget performance of 89.64%.  The sum of N10.1bn (Ten Billion) or 6.54% was received from other capital revenues against the proportionate budget of N154.33bn (One hundred and fifty-four billion) during the period under review. The breakdown of the revenue receipts from individual revenue sources is provided hereunder:

S/N           Sources                                 Approved        2012 Proportionate Budget        Actual   Revenue          % Per

Budget               Jan-Sept, 2012                   Jan– Sept,  2012

i     Internally Generated                   51,447,050,581        38,585,287,936                    34,589,515,448             89.64

Revenue

ii     Statutory Allocation

Including Mineral Rev.Derivation        170,000,000,000     127,500,000,000                  137,892,457,138           108.15

iii     Value Added Tax                           9,991,239,535         7,493,429,651                     7,448,261,654             99.40

iv     Other Capital Receipts                205,779,793,442     154,334,845,082                   10,100,855,881              6.54

Total                                     437,218,083,558     327,913,562,669              190,031,090,121      57.95



10.      The above revenue receipts represent an aggregate 11.85% increase on N169.89bn (one hundred and sixty nine billion, eight hundred and ninety million naira) recorded for the corresponding period of January to September, 2011.  The area that was significantly affected is the internally generated revenue from which N24.54bn (twenty four billion, fivehundred and forty million naira), was received in 2011 as against N34.58bn (thirty four billion, five hundred and eighty million naira) received for the same period in 2012.  This is an increase of N10.04bn representing 40.29%. There was, however a marginal decrease of 0.83% in the receipts from Statutory Allocation of N137.89 as against N139.04 received for the same period in 2011.

EXPENDITURE (JANUARY TO SEPTEMBER, 2012)

11.      As for expenditure, a total sum of N188.45bn (one hundred and eighty eight billion, four hundred and fifty million naira) was spent during the period January – September, 2012. Out of this amount, the sum of N124.53bn (one hundred and twenty four billion, five hundred and thirty million naira) was spent on recurrent items as against a proportionate approved budget of N135.63bn (one hundred and thirty five billion, six hundred and thirty million naira) representing a budget performance of 91.82%. The breakdown is summarized below:

Recurrent                           Approved                     2012 Proportionate                Actual   Expenditure        % Per

Budget                    Budget  Jan-Sept, 2012              Jan   – Sept,  2012

i    Personnel Costs           80,564,125,769                60,423,094,327                    47,905,180,777              79.28

ii   Overhead Costs           59,712,503,852                44,784,377,889                    38,215,904,189              85.33

iii  Con. Rev. Charge         40,569,967,479                30,427,475,610                    38,416,856,092            126.26

Total                           180,846,597,100          135,634,947,825                124,537,941,057         91.82



12.      The sum of N256.37bn (two hundred and fifty six billion, three hundred and seventy million naira) was budgeted for Capital Expenditure.  During the year, actual expenditure for the period, January-September, 2012 was N63.91bn (sixty three billion, nine hundred and ten million naira) as a against the proportionate budget figure of  N192.27bn (one hundred and ninety two billion, two hundred and seventy million naira), representing a budget performance of 33.24%. A breakdown of the Sectoral performance for the period is as follows:

Capital                                        Approved                    2012 Proportionate             Actual   Expenditure         % Per

Budget                    Budget Jan-Sept, 2012           Jan   – Sept,  2012

i   Economic                           88,478,125,971                  66,358,594,478                   18,592,535,142              28.02

ii   Social                               50,644,639,538                  37,983,479,654                     6,036,207,962               15.89

iii  Environmental                   55,028,612,276                 41,271,459,207                     5,276,932,922                12.79

iv  General Administration       25,220,108,673                18,915,081,505                     6,320,927,029                33.42

v   DESOPADEC                      36,500,000,000                 27,375,000,000                   27,690,153,903              101.15

vi  Contingency Fund                   500,000,000                      375,000,000                             -                              0.00

Total                               256,371,486,458            192,278,614,844                63,916,756,958             33.24



YEAR 2013 BUDGET

13.     Mr. Speaker, Sir, distinguished Members of this Honourable House, I have just given a brief review of the implementation of the 2012 budget.  Permit me to present a total budget proposal of N398.31bn(three hundred and ninety eight billion, three hundred and ten million naira)for our State for the 2013 fiscal year.  This amount comprises N145.94bn(one hundred and forty five billion, nine hundred and forty million naira)or 36.64% for Recurrent Expenditure and N252.37bn(two hundred and fifty two billion, three hundred and seventy million naira) or 63.36%for capital expenditures.

14.      The year 2013 budget proposal shows a decrease of N38.9bn (thirty eight billion, nine hundred million naira) or 8.9% when compared to the year 2012 approved budget of N437.21bn (four hundred and thirty-seven billion, two hundred and one million naira)

15.     Mr. Speaker, Members of this Honourable House, the main objective of Year 2013 Budget is to drive Delta State beyond oil. In the pursuit of this, our focus shall be programs that will stimulate job creation. Given the size of brought forward projects, emphasis in 2013 will be on ongoing projects. We have chosen key projects that we can complete and deliver in the year or in 2014. Where it was necessary, few new projects were also considered and included. I wish to emphasize that to ensure we deliver on our agreed Key Performance Indicators (KPIs), we are moving from the practice of “putting things” in the budget without going through the MDAs that implement; this as you are no doubt aware, often creates deviation from the overall objectives set by the Government. The 2013 budget is a shift in mindset from emphasis on amounts allocated to a focus on policies, objectives and results, and how the allocated amounts are linked directly and indirectly to achieving overall objectives of this administration. This is a remarkable improvement which will impact positively on budget implementation and performance in the coming years.

SOURCES OF FUND

16.      The main sources of funds for the 2013 budget are:
Sources     Proposed Budget 2013     Percentage %
i     Internally Generated Revenue     61,440,624,172         15.43
ii     Statutory Allocation Including Mineral Rev.   Derivation     198,513,285,148                          49.84
iii     Value Added Tax     11,441,860,370                    2.87
iv     Other Capital Receipts     126,921,344,146                      31.86
Total     398,317,113,836                                100.00



INTERNALLY GENERATED REVENUE

17.     During the preparation of this budget, there were revelations as to new areas where we can generate substantial revenues to increase our Internally Generated Revenue (IGR). We also arrived at new approaches for revenue collection that will also result in increase in the IGR. We intend to tap into potential revenue areas that have been dormant all these while. We have also resolved to partner with LGAs on collection of some aspects of IGR due to them, as a way of strengthening their capacity and increasing the collections, this will reduce the subsidy the State provides to LGAs.

18.      Mr. Speaker and honourable members, it will be insufficient for us to make ambitious revenue projections without the appropriate strategies. For this reason, we shall enforce to the fullest the provisions of the Delta State Internal Revenue Consolidation Bill 2009, and will also leverage on the recently passed bill by the House i.e.Delta State structure signage and advertisement agency bill. We appreciate the House for this bill; it came just-in-time.With this, leakages in the system would be minimized. Government will continue to provide the Board of Internal Revenue with the support it requires to strengthen its tax administration machinery.

19.     As I stated earlier, we have mapped out clear strategies to sustain our determination to improve our Internal Revenue Generating efforts.  It is in this regard that we are expecting the sum of N61.44bn (six one billion, four hundred forty million naira) from Internally Generated Revenue in 2013 as against the sum of N51.44bn (fifty-one billion, four hundred forty million naira) under the 2012 budget. The IGR estimates for 2013 is higher than the 2012 approved estimates by N10bn (ten billion naira) or 19.44%. I wish to passionately appeal to all Deltans, corporate bodies and other residents in the State to faithfully and mandatorily meet their civic obligations to the State without the use of force.

STATUTORY ALLOCATION



20.     The sum of N198.51bn (one hundred and ninety eight billion, five hundred and ten million naira) is expected from Statutory Allocation from the Federation Account in the 2013 fiscal year.  This amount is more than the N170bn budgeted last year by N28.51 or 16.77%.  This increase is attributable to higher expectations from oil revenues next year.

OTHER CAPITAL RECEIPTS/MISCELLANEOUS



21.      The sum of N126.92bn (one hundred and twenty six billion, nine hundred and twenty million naira) is proposed as other Capital

Receipts/Miscellaneous for 2013. This is a decrease ofN78.86bn (seventy eight billion, eight hundred and sixty million naira) or 38.32% from N205.78bn (two hundred and five billion, seven hundred and eighty million naira) approved for the 2012 budget.

RECURRENT EXPENDITURES

22.      The total recurrent expenditure estimates for 2013 is N145.94bn (one hundred and forty-five billion, nine hundred and forty million naira) made up of personnel costs of N57.66bn (fifty seven billion, six hundred and sixtymillion naira) or 39.79% and overhead costs of N49.20bn (forty-nine billion, two hundred million naira) or 33.71%. The Consolidated Revenue Fund Charges has a proposed sum ofN39.07bn (thirty nine billion, seventy million naira)or26.78%. On the whole, the recurrent proposal for 2013 is lower by N34.90bn or 19.30% when compare with the sum of N180.84 approved for 2012.The recurrent expenditure estimates is summarized hereunder:


Items     Proposed Budget 2013     Percentage %
i     Personnel  Costs     57,663,459,536                  39.51
ii     Overhead   Costs     49,201,030,693       33.71
iii     Consolidated Revenue       Fund Charges     39,077,404,248                       26.78
Total     145,941,894,477       100.00



CAPITAL EXPENDITURE ESTIMATES

23.      The proposed capital expenditure estimates for 2013 is N252.37bn (two hundred and fifty two billion, three hundred and seventy million). The proposal is N3.96bn (three billion, nine hundred and sixty million) or 1.56% lower than the 2012 capital budget of N256.37bn (two hundred and fifty six billion, three hundred and seventy million). The sectoral breakdown of the capital expenditure estimates is as stated hereunder:


Sector     Proposed Budget 2013     Percentage %
i     Economic     79,554,878,380                          31.52
ii     Social     46,984,952,781                          18.62
iii     Environmental     50,758,764,931                          20.11
iv     General Administration     37,576,623,267                          14.89
v     Delta State Oil Producing Areas Dev. Commission     36,500,000,000                          14.46
vi     Contingency     1,000,000,000     0.40
Total         252,375,219,359     100.00



At this juncture Mr. Speaker Sir, and Honourable Members, let me now highlight some salient areas of the capital proposals while the details of the budget would be given by the Honourable Commissioner for Economic Planning at a later date.



ECONOMIC SECTOR

24.     Our focus on agriculture as a tool to achieve Delta beyond oil will be sustained.  Our desire is to remain on the path of massive food production for the increasing population and the production of industrial raw materials through the establishment of small and medium scale enterprises. It is our responsibility to encourage and assist all Deltans to engage in farming activities in order to provide enough food for consumption, with surplus for sales and export. The sum of N6bn (six billion naira) is proposed for the agricultural sector in 2013 fiscal year.

25.     In line with the sustained effort of this administration to ensure the development of power supply infrastructure across the State, and also to support the industrialization agenda, emphasis would be placed on the completion of ongoing power generation, transmission and distribution projects in the State during the 2013 fiscal year. These include the Delta State Independent Power Plant for which N4bn (four billion naira) is allocated as well as the construction/upgrading/rehabilitation of power distribution network in both urban and rural communities in the state.

26.     Mr. Speaker, in building a Delta that will prosper beyond oil, we considered it important to embarked on the following critical infrastructures- Asaba International Airport, upgrading Osubi Airport to international standards, special economic zones and industrial clusters, (Koko/Ogidigben Free Trade Zone, Warri Industrial Business Park, and Asaba ICT Park). In this regard, the sums of N4bn, N4bn, N7bn, N2bn and N1bn are provided respectively to complete and sustain the projects in 2013. We thought we should harness our people’s entrepreneurship skills through our Micro Credit Scheme and nurture SMEs. We have over 100,000 beneficiaries of the Scheme whose stories are as enthralling as they are varied. Other States are understudying the Delta State model because of its acknowledged success.  The sum of N1bn (one billion naira) is allocated to the Micro Credit Scheme in the 2013 budget proposal.

27.     We have put in place plans to establish ten (10) industries this year to promote Medium and Small Scale Enterprises in the State. These industries will include four fish feed mills and six cassava processing plants. These industries will be managed by private investors to make them viable and ensure efficient management.

28.     Mr. Speaker, distinguished members of this august Assembly, from what we have been doing, the picture of Delta State that is emerging, is one that should give us great optimism and belief in the State and ourselves. For this reason, I feel that we should take pride in our infrastructure program. I am confident that with our major road network projects, we are gradually eliminating bottlenecks in movement of goods and creating major networks grids to link all the corners of the State.  A total sum of N20.24bn (twenty billion, two hundred and forty million naira) is provided for their completion in the 2013 proposed budget.

29.     This administration is committed to reducing loss of lives on our roads. For this reason, Government has purchased and distributed 1,250 tricycles, 605 small buses and 60 big buses (Marcopolo) to major cities in the State. The objective is to provide modern, comfortable, safe and cheap means of transportation to our people. The ban on okada riders in Asaba, Warri, Effurun and Udu axishas taken-off.A total sum of N2.12bn (two billion, one hundred and twenty million naira) has been provided for the sustenance of our mass transportation in 2013.

SOCIAL SECTOR

Education

30.     Government will continue to give priority to education in the State. We are investing heavily in infrastructure upgrade and modernization of our public schools for our children Teaching and non-teaching staff facilities are also being upgraded. So far, about eighteen thousand classrooms have been built, renovated or upgraded. In the coming year, we will do more.

31.     Through our liberal program in education, we are giving our brightest youth with first class degree, a head start in life. Our offer of scholarships, up to PhD level, tenable in any university of their choice, is a deliberate investment in the future. In the 2013 fiscal year, government intends to increase the tempo of work on the various education projects. In this connection, Mr. Speaker, the sum of N6.93bn is being budgeted for primary and secondary schools infrastructure project and N2.0bn(two billion naira) for the on going Four (4) New Polytechnics in the State. We shall also complete all on-going projects in our university campuses.

Health

32.     Health as we all know is wealth and a healthy State is a wealthy one. That is why our policies and programs of the State Ministry of Health are geared towards improving the health status of the people. We are making progress in addressing maternal and child mortality rate in the State. There is a steep drop in maternal and child mortality rate in our hospitals. New health care facilities are being constructed or upgraded, but of note for me is the progress of Oghara Teaching Hospital as a centre of excellence, which in the nearest future would become centre of note in Africa. I am sure that with Oghara Teaching Hospital, we will continue to reverse the search for healthcare treatment outside Nigeria.

33.     A lot has been achieved these past years and we have outstanding record in our healthcare services especially in the free health programs aimed at fulfilling the policy of bringing quality health care services to the grass root population through the Maternal Health Care, Under-5 Health Care and Rural Health Scheme. Other programs are Malaria Control, HIV-AIDS/Leprosy/Tuberculosis control programs, Immunization and supervision of Health Institutions-(Public and Private) and Construction, Rehabilitation, Equipping of Health facilities and institutions. To this end, a total sum of N7.12bn(seven billion, one hundred and twenty million naira) have been earmarked for the Specialist Hospital, Oghara, the Central Hospital, Asaba, Remodeling and Rehabilitation of EkuBaptist  Hospital, Eku, Maternal and Childcare Centre, Warri &Ekpan, and Upgrading of Four Central Hospitals to Specialist Hospitals at Warri, Ughelli, Agbor, and Sapele.

Social Development and Sports

34.     Mr. Speaker, Delta State is known as the number one in sports in the federation and has consistently maintained this position. We have achieved so much in Sports Development. We have been champions at four out of the last six editions of the National Sports Festival. This development has continued to be a source of pride to every Deltan, and has served as a tool for promoting and sustaining peace and security. Government intends to sustain this exalted position of sporting performance.

ENVIRONMENTAL SECTOR

35.     Mr. Speaker, as you are aware, the latest flood disaster was triggered by the unusual heavy rainfall that was recorded this year and the opening of the Lagdo Dam in Cameroun. The incident had caused huge damage to our communities where lives and property have been lost.  It has also affected our ecology. To cushion the suffering of our people, 18 (eighteen) relief camps have so far been opened to cater for the flood victims. Following what had happened, which has been attributed to nature, we cannot continue to be ignorant or negligent of the environment, particularly the flagrant abuse of the environment. It has awakened our consciousness not to underestimate the capacity of heavy flood to cause huge destruction in our environment.

36.     Old ways of thinking and doing things have to change. We have commenced action to protect the environment with relevant bill which shall be presented to this House in due course.  Unapproved structures standing on water ways are being removed. In the days to come, we would unfold more measure for strengthening our flood protection system.

37.     As a way forward and for better and larger participation, we shall in the course of 2013 introduce measures aimed at educating our people more on the issue of environment and climate change. More so, we are now determined to redouble our efforts in enforcing our town planning laws. It is for our collective good. We will give desired attention to the issue of environmental pollution and destruction associated with oil and gas exploitation. In addition, problems of flooding, shore and coastal erosions that are on the increase, siltation and intrusion of weeds in the riverine areas of the State which have hindered water transportation and fishing will be addressed in 2013.

38.     Meanwhile, in view of the devastating effect of flooding that ravaged places like  Asaba, Kwale, Patani, Warri, Uvwie, Sapele and other places with widespread flooding this year, we will ensure that our natural water ways are free to enable discharge of water to drains. Thus, the sum of N2billion (two billion naira) is set aside for Flood Intervention Measures across the State. This is outside other provisions such as N2.0bn(two billion naira) andN850m (eight hundred and fifty million naira) for Asaba and Warri drainage projects respectively.

DELTA STATE OIL PRODUCING AREAS DEVELOPMENT COMMISSION DESOPADEC



39.     In accordance with the law setting up the Commission, the sum of N36.5bn(thirty six billion, five hundred million naira) has been set aside, representing 50% of projected derivation revenue receipts from oil accruable to Delta State for the development of oil producing communities. Government will continue to monitor the activities of the Commission to ensure that the funds disbursed to it are appropriately utilized and accounted for. Government will continue to support the Commission to improve its administrative capacity to deliver on its mandate.

40.     Subsidy Reinvestment Program (SURE-P) – in continuation of the ongoing SURE-P activities, we will utilize the proceeds to create about 10,000 jobs for youths. These will be in the area of traffic controls, environmental monitoring, and security. We will also deploy part of the funds for road maintenance, transportation, education, agriculture, and micro credit.

Conclusion

41.     Mr. Speaker, distinguished members, Delta State Government will not relent in its commitment to the security of lives and property of our people as this is a basic requirement for ensuring the continuing growth and development of the State and well-being of its citizens. No matter what enticing figures we set out in the budget proposals for next year, our projections will be ineffective if we do not make conscious effort to ensure peace, security and harmony in the State

42.     Mr. Speaker, once again let me register my profound appreciation to the legislature for their unwavering support and wise counsel. I will also like to thank members of my cabinet for their support. The budget is our collective statement. Your positive and encouraging contributions have been most helpful. And, very importantly, my sincere appreciation goes to the wide range of Deltans who provide feedback and ideas on how Delta could work better and differently.

43.     The 2013 Budget continues with our tradition of placing the well-being of Deltans as top priority. What is important is the creation of a brighter future for every Delta child, a future full of hope and prosperity, not fear or hatred. Over the last 5 years, Government charted a clear path for our beloved State to achieve the state vision encapsulated in our 3-point agenda. In an environment of global uncertainties, the strong support of all Deltans is mandatory for us to become a developed and prosperous State.

44.     Mr. Speaker, and distinguished members of this Honourable House, Ladies and gentlemen, I thank you for your kind attention. I wish you peace, love and God’s protection and guidance in all your present and future endeavours.

Thank you.



Office of the Governor,

Government House

Asaba.

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