BY BOLANLE OKE

THE draft 2012 budget presented to the Osun State House of Assembly by the Ogbeni Governor is the first to be presented conceptualized and formulated by the Action Congress of Nigeria government in Osun State. Fiscal discipline and performance planning represents a central thrust in the conceptualization of the Budget.

Fiscal discipline is essential in order to resuscitate, “..the old values of hard work, moral discipline and integrity for which the Yoruba nation was noted in the past”.

For example, although it inherited the 2011 budget (as reviewed) from the outgoing administration “Our government has been very prudent not only in the management of our financial resources but also with regard to human and material resources. Rather than running into deficit, the state government of Osun will be ending this year on a credit note.”This is quite a departure from the modus operandi of the ancient regime.

The size of the draft 2012 Budget is N146,674,283,140.00 (One Hundred and Forty-six Billion, Six Hundred and Seventy-four Million, Two Hundred and Eighty-three Thousand, One Hundred and Forty Naira.

The Osun State government believes in what one commentator has already termed as ‘total governance’ This represents a structural framework with which to achieve a multiplier effect for the state’s economy by linking key economic sectors for employment generation and widening the tax base.

This has already been reflected in such schemes as the O’YES agricultural scheme which has translated into 20,000 new sustainable jobs aimed at curtailing youth unemployment.

Agriculture on which the state government is virtually betting the ranch (the pun is deliberate) remains the decisive focus in the concept of total governance. It could hardly have been otherwise since 70 percent of the population is engaged in all forms of farming enterprises.

In this sector the empowerment of farmers through loan provision for cooperative groups opening up of thousands of acres of virgin land, tractorising of farmland at subsidized rates will be intensified. The government will continue in the next fiscal year to give necessary encouragement to farmers by making fertilizer available to them at subsidized rates.

An Independent committee of experts has in addition been put in place to advise the government on the distribution of fertilisers to genuine farmers as part of our resource optimization strategies. Given the importance attached to agriculture and rural development sub-sector, a total sum of N5.6 billion has been provided in the 2012 Budget to fund the various government programmes on agriculture and rural development in the next fiscal year.

After 20 years the industrial base of the state is in a pathetic state. Unfortunately, overall economic prosperity depends on an active and growing industrial sector. In the case of osun state the government is correctly looking at an agro_ industrial based model. Successive governments in the state alas, have depended incestuously on the handouts from the centre. The Aregbesola administration is clearly determined to wean the state of this dependence.

Finance

The administration inherited a staggering commercial bank liability of about N20 billion from the immediate past administration. This amount includes the huge N18.38 billion loan obtained from a particular commercial bank and other loans from three other commercial banks. The liabilities were being serviced with an average sum of N1 billion monthly when the Aregbesola administration assumed office.

The major challenge for the administration at inception was how to move the state forward with the excruciating monthly loan repayment of N1 billion in spite of the state’s lean financial resources. The first major assignment of the administration on assumption of office was therefore to find means of tackling the issue of the huge monthly loan repayment with its debilitating effect on the economy of the state.

Nevertheless through financial engineering and re-engineering, the State Government paid back the N2 billion owed the three commercial banks by the former administration within the first half of this year. Similarly, the State Government has been able to refinance at a lower interest rate and longer tenor the N18.38 billion commercial bank liability left behind by the former administration.

The refinancing of the loan has drastically reduced the excruciating monthly repayment of approximately N616 million on the N18.38 billion alone to about N100 million monthly.

Presently, there has been an appreciable boost in the state’s Internally Generated Revenue (IGR), in fact, its doubling from N300 million to N600 million, which we believe will definitely get better in the coming year. Adequate training and re_training will be mounted for the staff in order to equip them with relevant and modern tools for an efficient and virile tax administration.

Equally, the unconducive environment under which some of our revenue officials conduct their official business will be looked into. Government will renovate the existing structures while efforts will be made to put up new structures where necessary. Vehicles and motorcycles will also be provided to ensure adequate mobility.

Osun means business

It is clear from the brief outline above that with the 2012 budget presentation a clear message is being sent out -this is that Osun State means business. The clear central theme of the budget is to put together the infrastructure which will then induce the enabling environment for a jobs-led sustainable economic growth.

The state has tremendous economic prospect and the Aregbesola administration obsessed with employment generation and pushing up the IGR is going out of its way to woo investors and business partners. In the years ahead Osun will be one of the most attractive and dynamic markets to be in.