Details Of Gov Ikpeazu’s 2021 Budget Speech Presented To 7th Assembly *Pleads for passage of Bill into Law

By Editor

Abia State Governor, Dr. Okezie Ikpeazu has today presented says the 2021 Budget of the state was prepared “amidst a challenging global and domestic environment”.

He further maintained that the outbreak of the pandemic crippled the economy of the state.

Below is the full speech of the Governor:

2021 ABIA STATE BUDGET SPPECH:
BUDGET OF LOCAL CONTENTS AND SUSTAINABLE DEVELOPMENT

PRESENTED BY:OKEZIE VICTOR IKPEAZU, PH.D –
GOVERNOR OF ABIA STATE, NIGERIA
TO THE 7THABIA STATE HOUSE OF ASSEMBLY,

ON MONDAY, DECEMBER 7, 2020.

Protocols

It is with pleasure that I present the 2021– 2023 Abia State Budget Proposals (Estimates) to this Honourable 7th  Abia State House of Assembly.
Mr. Speaker, Honourable Members of the Abia State House of Assembly, at this juncture, I wish to commend your remarkable efforts in approving and passage of the Revised 2020 Appropriation Law, in response to the Coronavirus pandemic. In line with our commitment, we have worked extra hard to ensure early submission of the 2021–2023 Medium-term Expenditure Framework. Given the collaboration between the multiple arms of Government in the preparation of the budget, it is my sincere hope that this 7th Assembly will pass this Bill into law early enough to enable implementation to commence by 1stJanuary 2021 and sustain the restoration of a predictable January – December fiscal year cycle in Abia State.

As is our practice, I will present the highlights of the State 2021 draft estimates and budget proposals. The Honourable Commissionerfor Finance, will later provide the full details of these proposals in his breakdown.

RECENT DEVELOPMENTS
The 2021 Budget was prepared amidst a challenging global and domestic environment.

The depth and reach of the coronavirus pandemic, the resulting global economic recession, low oil prices, heightened global economic uncertainty and even security challenges facing the country have all had important implications for the State’s economic plans and operations. Nationally, real output growth declined by 6.1 percent in the second quarter of 2020. The other quarters barely fared better. I am glad to note, however, that through our collective efforts, Abia State economy performed relatively better.

We thank all Abians, for your perseverance and continued support during these difficult times. We remain unwavering in our commitment to actualize our vision of a bright future for Abians.

Mr. Speaker, Honourable Members, in preparing this 2021–2023 Multi-year Budget, consideration was given to effective and efficient resource allocation and utilization. In particular, we considered:

• Reinventing the Abia spirit of industry and ingenuity. To this end, we intend to stimulate industrialization through the establishment of Cottage Industries in each of the 17 LGAs of the State.
• Proper prioritization of peoples’ needs to ensure that programmes and projects meet citizens’ demands and that their implementation guarantee value-for-money.
• Careful identification, harmonization and monitoring of revenue generating windows for effective revenue mobilization. This will be accompanied by putting appropriate measures in place to cushion revenue leakages, economic waste in resource utilization and to ensure proper resource redistribution.
• Identification and promotion of local contents in all Abia innovations and inventions, products and services for sustainable socio-economic development of the State. Our goal for 2021 is to attain sustainable development by increasing local content.
• Re-jigging Agencies of Government to ensure they are more productive, coordinated and effective in delivering services to Abians and interpreting our vision of delivering multi-sectoral growth for the State.

REVIEW OF 2020 APPROVED BUDGET PERFORMANCE IN THE STATE

The year 2020 was a peculiar fiscal year with peculiar challenges and occurrences. The invasion of COVID-19 Pandemic around the end of the first quarter of the year altered both the administrative and socio-economic plans of the State Government. The Government, through the State inter-ministerial taskforce on Covid-19, worked assiduously to prevent and curtail the spread of the virus to its citizens. This was achieved through apt emergency response to the outbreak by trained Health personnel through contact tracing, provision of holding areas, equipment of isolation and treatment centers for patients, among other measures. Other efforts made by this administration to mitigate the spread of the Pandemic across the State include:

1. Prompt payment of State workers’ salaries and allowances, including the special Covid-19 allowances to all frontline Health workers
2. Establishment of holding areas, through isolation and treatment centers and 2 molecular laboratories to fast track the diagnosis of diseases before treatment.
3. Distribution of food/health supplies and other palliatives to Abia citizens to reduce the adverse effect of covid-19 such as hunger and exposure to the disease.
4. Sustained implementation of the Basic Healthcare Provision Fund (BHCPF) through the Primary Health Care Agency.
5. Improved efforts towards the fight against and control of communicable and non-communicable diseases such as Tuberculosis, Measles, Lassa fever, Malaria etc. in the State.
6. Active Nutrition Intervention for children between 0 and 59 months through Accelerating Nutrition Results in Nigeria (ANRiN).
7. Establishment of Tele-Health outfit with dial-a-doctor facility.
8. E-Learning and Radio/Television classroom program in response to COVID-19 lockdown.

BUDGET THEME AND EXPECTATIONS OF THE 2021 BUDGET

Honourable Members of the 7th Assembly; let me now turn to the Abia State 2021 Appropriation Bill. The State currently has two major plans – a short term plan which is the 5 pillars sectors of investment as outlined by the Administration from the very beginning and the Abia State Agenda 2050 which is a long term plan covering a period of 30 years. The latter is at the finalization stage, being prepared with support from the Partnership Initiative for Development in the Niger Delta (PIND) and shall be forwarded to this August Assembly for review and legislation not long from now. The 2021 budget is designed to further the goals of these two plans.

Specifically, the 2021 – 2023 Medium Term Expenditure Framework emphasizes local contents and sustainable development. This Administration is convinced that, as challenges mount on the fiscal position of the Federation and as the global environment becomes increasingly tumultuous, long term survival will have to depend on each people’s capacity to innovate, in the building of industries and in adding value. Such production and productivity will rely extensively on the capacity of people who have long term interest in the development of a particular economy for it to be sustainable.

And no one else has more interest in the long term development of Abia than Abians themselves. As it is, the State is already blessed with an exceptionally high proportion of people who are naturally innovative, creative, resilient and dogged. We therefore see the Government’s job in this fiscal year as basically to find means of supporting them to do better what they already know how to do and are doing well.

Our Administration intends to support local technologies and techniques as well as leverage on the State’s areas of comparative advantage in product and service marketing. We intend to focus on already enormous number of small and medium scale enterprises operating in the State and support them both to advance in their areas of advantage and create new areas of competitive advantage. In some instances, we might need to undertake fresh but critical surveys to strengthen what we already know, identify new areas and minimize the weaknesses and threats faced by these businesses. We intend to harness their strengths and create new opportunities for them to explore for the good of all Abians.

The above does not imply leaving out any sector, people or area. Our Administration will aim to complete all on-going capital projects. It will, however, initiate a few new ones particularly those relating to rural-urban access or feeder roads to encourage evacuation of agricultural and food products to the urban markets.

REVIEW OF 2020 BUDGET
The original 2020 Budget was based on the following assumptions
 Oil price benchmark  of 57 USD per barrel
 Exchange rate of N350/USD
Based on the above, aggregate revenue of N67,249,300,000.00 (Sixty Seven Billion, Two Hundred and Forty Nine Million, Three Hundred Thousand Naira) was projected from FAAC and N40,490,322,776 (Forty Billion, Four Hundred and Ninety Million, Three Hundred and Twenty Two Thousand, Seventy Six Naira)from State Independent Revenue(IGR) to fund the Budget of N137,419,617,116 (One Hundred and Thirty-Seven Billion, Four Hundred and Nineteen Million, Six Hundred and Seventeen Thousand, One Hundred and Sixteen Naira) only being the total budget outlay for 2020. This gave a deficit of N29, 679,994,340 (22.6% of the budget) to be financed mainly by domestic loans.

REVIEW OF THE REVISED 2020 BUDGET
The 2020 Fiscal year started with some subdued optimism due to “negative surprises in economic activities” intensified by the outbreak of COVID-19 pandemic. The unprecedented drop in the price of crude oil to between 20 and 30 USD per barrel in the International market and the attendant drop in revenue for Nigeria necessitated a need for economic planners to revise their respective National and State budgets to meet present reality and to seek alternative sources of revenue to address budgetary needs.

As at June 30, 2020 the aggregate revenue inflow from both FAAC and state Independent Revenue was, N31,901,064,095.53 (Thirty-One Billion, Nine Hundred and One Million, Sixty Four Thousand, Ninety Five Naira and Fifty Three kobo) only viz:

Statutory Revenue Allocation: N19,917,135,629.31
VAT- N6,036,020,490.84
IGR N5,947,907,975.48
Total N31,901,064,095.53

Both FAAC and State independent revenues were significantly less than projected due to reduced economic activities as a lockdown was enforced to contain the pandemic. Such revenue heads like VAT which depend on the activities of economic agents were seriously affected, affecting the overall revenue accruing to the State. In addition the exchange rate of the Naira relative to other major currencies depreciated significantly to N387.50/USD. Meanwhile, annual inflation rate remained in the double digit range, standing at 12.45 percent as at June, 2020. All these meant output implosion as GDP growth went down to -46.0%.

These significant macro-economic changes and their effect on the economy necessitated the downward revision of 2020 original budget by 40 percent for overhead and 45 percent for capital expenditures respectively. This is to ensure that the low accruals from the revenue inflow can realistically fund the 2020 budget. The Revised 2020 Budget outlay was N102,660,432,904.00 (0ne Hundred and Two Billion, Six Hundred and Sixty Million, Four Hundred and Thirty-Two Thousand, Nine Hundred and Four Naira) only with breakdown as follows:

Recurrent:- N55,280,341,384.00
Capital:- N47,380,091,520.00
Total: N102,660,432,904.00

2021 BUDGET FRAMEWORK
ABIA STATE BASIC 2021 MACRO-ECONOMIC ASSUMPTION
Honourable Members, the State adopted 2021 – 2023 Medium Term Expenditure Framework and Fiscal Strategy Paper of the Federal Government which set out the parameters for the 2021 Budget as follows:
• Benchmark oil price of 40 US Dollars per barrel;
• Daily oil production estimate of 1.86 million barrels (inclusive of Condensates of 300,000 to 400,000 barrels per day);
• Exchange rate of N379 per US Dollar; and
• GDP growth projected at 3.0 percent and inflation closing at 11.95 percent.

It is the wish of the present Administration to prepare an equitable, realistic and implementable budget in the context of multi-year (2021-2023) Medium Term Expenditure Framework (MTEF) that will be in line with the current economic realities.

The budget targets recovery of the State economy with a measurable growth path from COVID-19 pandemic going forward.

The Total projected Budget outlay for 2021 fiscal year is N131,815,753,720 (One Hundred and Thirty One Billion, Eight Hundred and Fifteen Million, Seven Hundred and Fifty Three Thousand, Seven Hundred and Twenty Naira only) showing an increase of 22.12% from 2020 Revised Budget. 

The Break Down is as follows:-

1) Recurrent expenditure of N62,624,512,746 which is 47.51% of the total expenditure and 11.73% increase from the 2020 Revised Budget.

RECURRENT EXPENDITURE
• Personnel Cost = (N31,165,042,809)=49.77%
• Overhead Cost = (N16,266,583,646)=25.98%
• Consolidated Revenue Fund Charges = (N15,192,866,291)=24.26%

2) Capital expenditure of N69,191,240,974 which is 52.49% of the total Budget expenditure and 31.52% increase from the 2020 Revised Budget.

The Sectoral allocation of the Capital expenditure is thus:
• Administrative Sector = (N9,549,163,974)=13.80%
• Economic Sector = (N40,766,132,000)=58.92%
• Law and Justice Sector = (N407,125,000)=0.59%
• Social Sector = ( N18,468,820,000)=26.69%

The percentage of distribution of aggregate expenditures to the 2021 total Budget Outlay is 47.51% for recurrent and 52.49% for capital. The 2021 Budget is aimed at completion of on-going projects and programmes. New projects will mainly be in the form of COVID-19 responsive projects that aim to cushion the shocks of the pandemic and assist the State economy recover quickly. Projects dealing with reducing the constraints of rural areas in the evacuation of men and materials to urban centres are also included.

ADMINISTRATIVE SECTOR:
The Administrative sector is very crucial in the dispensation of development policies and programmes to seeing to the realization of government set goals and objectives. In 2021 budget, we will strengthen the existing administrative institutional framework, build capacity of public servants, ensure value for money and improve the quality of public service delivery.

Therefore, reforming the civil service as the core of development administration is very paramount to this administration. Without it, a number of the noble initiatives that have been instituted by this Administration may not be sustained. Besides, the capacity of the public service to deliver on the critical pillars of this Administration’s goals will be compromised. The intended boost on the effectiveness and efficiency of the State public service will be pursued in partnership with willing development partners and reform agents within and outside the State.

The Government will also strengthen the State Fiscal Transparency, Accountability and Sustainability (SFTAS) programme to implement some mapped reforms in Public Finance Management in the State. In the same vein, the State Long-term Development Plan is being finalized and hopefully will be brought to this Honorable House for legislation before the 2nd quarter of 2021. it is the hope of the Administration that the Long Term Plan will consolidate some of the thinking of the people of Abia for long term development into an actionable document that the House will give its support to.

ECONOMIC SECTOR:-
Mr. Speaker and Honourable Members, the State economy cannot meet the projected growth rate stated earlier if we do not make concerted efforts towards making trade, development of Small and Medium Scale Enterprises, revitalization of cottage industries, investment in Information and Communication Technology (ICT), food security, boosting cooperative societies and cluster business/farming in the State a priority. Abia State is already known for these programmes but we now need to be deliberate to meet new heights unfolding with technological breakthroughs while curtailing challenges imposed by global economic constraints.

We will also work on the natural endowments in the three senatorial zones to efficiently draw out resources that will boost the State economy. The state has some ongoing socioeconomic catalyst projects and programmes that must be delivered before the end of second quarter of 2021. Again we will strategize to harvest opportunities made available to the State through renewed partnership with Development Partners that have programmes and projects that can help Abia attain her goals.
Given the multiplier effects of investment, the creation of Investment Department is yielding positive result which is aimed at bringing robust engagements in attracting new and viable investments into the State. The ‘Made-in-Abia products campaign is being advertised globally and is receiving international recognition through e-commerce platforms.

LAW AND JUSTICE SECTOR
The Judiciary midwives and gives redress to aggrieved citizens and inhabitants of the State. The Welfare of the Judiciary Staff is paramount if that responsibility is to be met. There is therefore need to create conducive atmosphere for the judicious dispensation of justice in the State.

Mechanisms are also being created and established in the State Judiciary to strengthen her independence and allow for timely handling of matters and quick dispensation of justice to the Public.

SOCIAL SECTOR:-
The Social Sector, which comprise Education, Health, Youth and Sports Development, Women Affairs and Gender issues and all programmes that emphasize social inclusion, shall be given priority attention in the 2021 fiscal year.

CONCLUSION:-
Mr. Speaker, Distinguished and Honourable Members of the 7th State Assembly; let me use this opportunity to, again, commend your firm commitment towards ensuring a very harmonious and productive relationship with the Executive. It is important to further deepen this relationship in the interest of our people.

Let me re-emphasize that Abians expect that the 2021 Budget will contain only implementable and critical projects, which when completed, will significantly address current structural challenges of the economy, improve the business environment and accelerate economic recovery.

May I conclude by commending Mr. Speaker and the State Assembly for its support in piloting the State’s economy during these very challenging times. I have taken note of the remarkable improvements that have been made to the infrastructure of the House of Assembly and the vibrancy of the various Committees and commend you for being thorough and firm. We remain unwavering towards sustaining our corporation with the House and I firmly direct all organs of the Executive to work harmoniously with the House of Assembly. We believe that as we work together, we will jointly deliver on our joint mandate to Abians.

It is with great pleasure, therefore, that I lay before the Distinguished members of the 7th  Abia State House of Assembly the 2021 Budget proposals of the State Government, for your kind consideration and passage. I thank you and may God continue to blessAbia State.

Okezie Victor Ikpeazu, PhD, FNES
Governor, Abia State
December 7, 2020