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How we tackled recession, by Okowa

Governor Ifeanyi Okowa spoke on how Delta State rose above recession in his 2018 Budget speech to Delta State House of Assembly. Excerpts:

FROM LEFT RT.HON.SHERIFF OBOREVWORI SPEAKER DELTA STATE HOUSE OF ASSEMBLY,GOVERNOR IFEANYI OKOWA AND RT.HON.FRIDAY OSANEBI DEPUTY SPEAKER DURING THE 2018 BUDJECT PRESENTATION AT THE HOUSE OF ASSEMBLY FRIDAY [PHOTO NATH ONOJAKE]
The positive economic indices emerging from the National Bureau of Statistics for the second quarter of this year may have signalled an end to perhaps what has been the longest running recession in the country.

In addition, peace has returned to the Niger Delta and oil export from Forcados trunk has commenced. We are hopeful that the Federal Government will put measures in place to enforce its directive to oil companies to locate their head offices in their areas of operation. If implemented, this will not only enhance our internal revenue generating capacity, it will also create employment opportunities, engender trade and commerce and give the needed fillip to the State’s economy.

Overall, the fiscal outlook is promising and Nigeria may well be on the path of economic recovery and growth, with all the favourable implications that this has for us to fully realise our vision as encapsulated in the S.M.A.R.T agenda. As you are well aware, the vision and values of the S.M.A.R.T agenda form the building blocks of the Delta State Medium Term Development Plan (2016-2019) with the following policy priority areas:

Combat the perennial problem of youth restiveness by adopting cross-sectoral, multi-pronged approach to job and wealth creation with strong emphasis on raising entrepreneurial leaders to drive the economic diversification of the State;

Promote civic engagement in our communities and create the peaceful atmosphere necessary for development to take place;

Make agriculture regain its pride of place in the economy through specific policies and programmes geared at making farming more attractive to the youth, stimulate and boost farm yields, and develop the agricultural value chain;

Lead in the provision of universal healthcare coverage and cutting edge technology for broad-based and excellent service delivery essential for a healthy and productive populace;

Build an educational system that will raise products whose educational advantage will help them to become thinkers, innovators, leaders, and managers that will excel globally;

Partner with relevant stakeholders/investors to attract infrastructural funding to build liveable cities and towns for the benefit and enjoyment of current and future generations;

Develop leadership skills across all strata of the civil service establishment and among the political class; and Build organisational capacity through good governance structures in the various Ministries, Departments and Agencies of Government for efficient, effective and timely service delivery.

Rising above Recession: One of the major achievements of our administration is stabilising the ship of state in the wake of the recession that swept through the country.   Confronted with dwindling receipts from the Federation Account and Internally Generated Revenue vis-à-vis inherited contractual obligations, the first challenge we faced was the payment of salaries to the huge workforce.

To put it in context, the total staff strength of the Federal Civil Service is about 89,000.   As at the time we assumed office on May 29, 2015, Delta State had over 60,000 workers on its payroll. However, we were able to meet our obligations to the workers through debt payment re-scheduling, cutting waste, contracts reviews, and prudent management. As part of the on-going biometric exercise to weed out ghost workers, the State has been able to prune the size of the workforce to 55,000, which is still very high compared to that of peer States.

Considering the recessionary shocks that reverberated through the economy, it is no mean feat that we have not defaulted in paying our staff since the inception of this administration. We have paid all salaries to date and supported Local Government Councils in their constitutional responsibility of the payment of salaries in excess of N5b. We have also consistently made monthly provision towards the payment of the State’s obligation to the Contributory Pension Scheme and, indeed, paid out the sum of N2.5b in two tranches to cushion arrears. All other outstanding liabilities are being given priority attention even as we proactively engage with organised labour to reconcile whatever discrepancies may exist in terms of actual outstanding liabilities.

Wealth Creation: Job and wealth creation is the centrepiece of the S.M.A.R.T agenda, and the critical point of reference on which this administration will be assessed now and in the future. As a Special Purpose Vehicle, the Job Creation Office was created to design programmes to equip unemployed youths (graduates and school leavers) with the vocational skills, mind-set and resources to become self-employed and employers of labour. The design and implementation of the Job Creation Scheme is trainee-centred, service-oriented and results-based. The Scheme is being implemented along four paths namely:

– Skills Training and Entrepreneurship Programme (STEP)

– Youth Agricultural Entrepreneurs Programme (YAGEP)

– Special Programme for Persons with Disabilities (PwDs)

– Graduate Employment Enhancement Programme (GEEP)

So far, a total of two thousand three hundred and twenty four (2,324) unemployed youths including fifty one (51) Persons with Disabilities (PwDs) have been trained and established in enterprises of their choice. Another 4,000 youths were trained in vocational centres across the State. Under the State Employment and Expenditure For Results (SEEFOR) project to which the State has contributed N600m as counterpart fund, 5,312 youths were employed and trained on building their self-esteem, savings culture and entrepreneurship to sustain their livelihood. When we add these figures to the over 42,000 private sector jobs that were created by programmes and projects of the various Ministries, Departments and Agencies, we can clearly see that a new era beckons in Delta State.

These job creation programmes are transforming the lives of previously unemployed youths. Across the State, there are testimonies of successful start-ups and viable small businesses by those who were trained and established under the programmes. Some have grown to become employers of labour and are training other youths to become self-employed. Others have innovatively diversified into other businesses and trades to enhance their incomes and survival.

In addition, through GEEP, the State Government has created the first-ever electronic database of unemployed youths in Delta State. This database is now accessed by private sector organizations and employers of labour on an on-going basis. All of these developments have immense potentials for improved living standards for a substantial number of Deltans. As further testimony of the success of the Job Creation Scheme, it has been validated for partnership with the World Bank European Union funded SEEFOR project.

The Philosophy and Thrust of 2018 Budget:

Mr Speaker, the proposed 2018 Budget is formulated within the context of the successes – and challenges – of the past two years. It seeks to essentially consolidate the gains of the past as we strive to build an economy that works for everyone. As I did say in my inaugural address, people have very high expectations from this government. That has sometimes exerted serious pressure on political office holders and other top government functionaries.

We are determined to make good our commitments to the people of Delta State. That should never be in doubt. However, we can only do that within the limits of available resources. Therefore, not being swayed by sentiments or emotion, the proposed 2018 Budget is derived from the Fiscal Strategy Paper projections for years 2018 to 2020 and in compliance with International Public Sector Accounting Standards (IPSAS). It is a Budget of Hope and Consolidation.   I am confident that in the unlikely event of any internal or external shocks, we will be fine as long as we continue in our tradition of fiscal discipline, prudence and accountability.

2018 BUDGET ESTIMATES

I wish to announce a budget proposal of N298.078bn for the services of Delta State Government in 2018. This amount comprises the sum of N147.5bn or 49.48%  for recurrent expenditure, and N150.5  or  50.52% for capital expenditure.

INTERNALLY GENERATED REVENUE

The reforms we are undertaking in revenue collection, the plugging of leakages in all revenue sources, as well as the anticipated return of oil producing companies to Delta State is expected to impact positively on our IGR in the forthcoming year. It is, therefore, our projection to generate the sum of N71.3bn as internally generated revenue in 2018, representing 23.94% of the total projected revenues. The IGR estimates for 2018 is higher than the 2017 approved estimates by N1.1b  or  1.67%.

STATUTORY ALLOCATION

Using the forecast derived from the State’s Fiscal Strategy Paper as a guide, the sum of N178.1bn  or 59.73% of projected total revenue for the 2018 fiscal year is expected to come from Statutory Allocation. This amount is more than the sum of N148.9bn projected for the 2017 fiscal year by N29.1bn  or 16.35%.

The increase is based on the optimism that the current peaceful atmosphere in the Niger Delta region will be sustained and that, with the relative peace being experienced, some of the oil companies who vacated the region will return to the State. It is also our realistic expectation that the gradual improvements the Federal Government has recorded in the agriculture and manufacturing sectors will continue to impact positively on the overall expected returns in the 2018 fiscal year.

OTHER CAPITAL RECEIPTS/MISCELLANEOUS

The proposal for Capital Receipts for the 2018 budget has been scaled down from the sum of N64.8bn in the 2017 budget to N37.9bn or 71.09% in 2018. The reduction is hinged on the overriding objective to reduce the loan burden on the State.

RECURRENT EXPENDITURE

The proposed recurrent expenditure estimates for 2018 of N147.5bn is made up of personnel costs of N64.3bn  or  43.36%,  and overhead costs of  N46.8bn or  31.56%.  The Consolidated Revenue Fund Charges has a proposed sum of  N37.23bn or 25.09%.

The proposed capital expenditure estimates for 2018 is N150.6bn. The proposal is N14.1bn  or  9.39%  higher than  the 2017 capital budget of  N136.4bn.

Conclusion

In concluding, Mr Speaker, I wish to reiterate that we are determined to build a State anchored on inclusive economic growth and sustainable development. This administration has not wavered from its promises to the people of Delta State. In line with those promises, many programmes/projects have been executed; several are on-going while few need urgent attention and follow up.

As we celebrate the notable achievements in the last two-and-half years, we are also mindful of the fact that there is still plenty of work to be done.   Many families are still reeling from the harsh effects of the recession. Many of our youths are leaving school without the skills they need for the 21st century marketplace. Many small scale businesses are struggling to stay afloat. Therefore, we must give serious attention to putting our people to work and providing the enabling environment for small enterprises to thrive. This administration is determined to build a more prosperous, inclusive and secure Delta State.

 

 


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