BUDGET OF TRANSITION

SPEECH PRESENTED BY HIS EXCELLENCY, UMARU TANKO AL-MAKURA, GOVERNOR OF NASARAWA STATE ON THE OCCASION OF THE PRESENTATION OF THE 2019 FISCAL APPROPRIATION BILL TO THE NASARAWA STATE HOUSE OF ASSEMBLY, LAFIA: FRIDAY, 28TH DECEMBER, 2018.

1. The Right Honourable Speaker;
2. Principal Officers and Honourable Members of Nasarawa State House of Assembly.

Today marks yet another milestone in our journey to bequeath a legacy of good governance, progress and development to the people of Nasarawa State. It is, therefore, with gratitude to God, the Almighty that I stand before you, Honourable Members of the Nasarawa State House of Assembly to present the 2019 Appropriation Bill in compliance with section 121(1) of the 1999 Constitution of the Federal Republic of Nigeria (as amended). Indeed, this is yet another unique opportunity and privilege to perform this constitutional duty before this hallowed chamber for the last time as Governor of Nasarawa State.

2. The Right Honourable Speaker, Honourable Members, it will be recalled that last year, I stood before you to present the 2018 Budget which necessitated the implementation of this Administration’s well thought out policies and programmes aimed at sustaining our commitment towards consolidating on our developmental endeavours.

3. This is in tandem with our policy thrust since our assumption of office in May 2011. As you may recall, we made solemn undertaking to the people of Nasarawa State to execute policies and programmes that will uplift the living standard of our people and transform the State into a beehive of socio-economic activities. This is evident in our modest efforts in the construction of road networks and other physical infrastructure, provision of social amenities, healthcare delivery, education, agriculture, economic empowerment and, indeed, robust market development. This, we have continued to do mindful of our core principles of transparency, accountability, probity and prudent management of meagre resources as accrued to the State.

4. Mr. Speaker, Honourable Members, it is gratifying to state that the 2018 Budget performed optimally as we recorded tremendous achievements in the implementations of our policies and programmes. I am pleased to inform this Honourable House that most of the road construction, hospitals, sports facilities, school infrastructure, power and water projects, as well as provision of market facilities, among other projects have been completed. It is our determination to complete all on-going projects in the State within the remaining period of our Administration. Similarly, we have also paid special attention to the welfare of the physically challenged, women and children, as well as other vulnerable groups in our society. This is in line with our policy on inclusive governance.

5. It is pertinent to state that this Administration is committed to providing the best to its citizenry. Accordingly, in our strategic move to give the people a sense of belonging, this Administration has resolved to continue to provide the needed infrastructure that will move Nasarawa State to greater heights.

6. It is in this regard that we embarked on the construction, expansion and renovation of Hospitals, Nasarawa State Orphanage Homes among other infrastructure. This is aimed at bridging the gap in specific needs in order to improve service delivery and shelter for the vulnerable, especially children who are open to discrimination, neglect, abuse and exploitation, believing that this effort will be a platform for equal opportunities to enable such children to compete favourably with others in all human endeavours. I am happy to state that the befitting Orphanage Home has been completed and arrangements are already in place to move the affected children from their old location to the new one early in the year.

7. The Right Honourable Speaker, Honourable Members, I need to point out that our modest achievements over the years were made possible by the prudent management of the scarce resources anchored on our principles of transparency, accountability, probity and above all, the fear of God. These lofty ideals, I dare say, placed Nasarawa State in the same pedestal with the most economically viable States in the country.

8. Distinguished Honourable Members, let me reiterate once again that our strides in the service of our dear State would not have been possible without the commendable and worthy partnership of you, the Honourable Members. I commend this cherished collaboration between the Legislature and the Executive which has continued to add value to our interdependence. It is pertinent to stress that our collective efforts towards the realization of our goals justify our faith to deliver on our covenant with the good people of Nasarawa State.

9. In our determination to fulfill our electoral promise, we will sustain the supply of necessary agricultural equipment, fertilizer, pesticides as well as improved seeds in order to boost agricultural productivity. Our commitment in this regard is aimed at achieving the twin objectives of encouraging large scale mechanized farming to achieve economic diversification, on the one hand, and the gainful employment of our teeming youths into agricultural and related value chain activities as a necessary mechanism for reducing youth restiveness in the society. I am happy to bring to the notice of this Honourable House that all the five (5) Fertilizer Blending Plants have been successfully installed and ready for production by February, 2019.
10. At this juncture, Mr. Speaker, Honourable Members, it is my honour to present to you the Budget proposal for the 2019 fiscal year and its assumptions for your consideration.

Review of the Year 2018 Budget
11. Mr. Speaker, Honourable Members, it would be recall that on Wednesday, November 29th, 2017 I presented a total Budget of One Hundred and Twenty-two Billion, Eight Hundred and Twenty Million, Nine Hundred and Forty-three Thousand, Two Hundred and Eighty-four Naira (N122,820,943,284) only for the year 2018.

12. After due consideration, the Honourable House passed into Law the sum of One Hundred and Twenty-five Billion, Four Hundred and Nineteen Million, Six Hundred and Eighty-seven Thousand, Four Hundred and Eighty-four Naira (N125,419,687,484) only.

13. However, owing to the desire of Government to complete on-going critical projects started by this Administration, a supplementary budget in the sum of Twenty-three Billion, Two Hundred and Ninety-three Million, Sixty-eight Thousand, Eleven Naira (N23,293,068,011) only was presented to the Honourable House and passed into Law. This brought the total budget for the year 2018 to One Hundred and Forty-eight Billion, Seven Hundred and Twelve Million, Seven Hundred and Fifty-five Thousand, Four Hundred and Ninety-five Naira (N148,712,755,495) only.

14. Mr. Speaker, out of the budgeted amount, Fifty-one Billion, Eight Hundred and Nine Million, Nine Hundred and Seven Thousand, Three Hundred and Fifty-five Naira (N51,809,907,355) only was earmarked for Recurrent Expenditure, while Ninety Billion, Two Hundred and Seventy-eight Million, Eight Hundred and Forty-eight Thousand, One Hundred and Forty Naira (N90,278,848,140) only was budgeted for Capital Expenditure. Meanwhile, the sum of Six Billion, Six Hundred and Twenty-four Million Naira (N6,624,000,000) only was dedicated to the Consolidated Revenue Fund Charges of the State.

Highlights of Year 2018 Budget
15. The 2018 budget was focused on the following areas:
i. Completion of some on-going projects;
ii. Enhancement of Internal Revenue Generation (IGR);
iii. Completion of Market development;
iv. Completion of rural roads network and bridges;
v. Creation of enabling environment for Public-Private Partnership (PPP);
vi. Aviation infrastructure development;
vii. Intervention in Education to include Science and Technical Education, Special Education, as well as restructuring and rehabilitation of secondary schools and tertiary institutions;
viii. Improvement in Healthcare Service Delivery;
ix. Continued collaboration and meeting obligations with Development Partners and strengthening governance and institutions in line with global best practices;
x. Agricultural Liberalization with emphasis on extension services, encouraging commercial farming and cottage industry for value chain;
xi. Solid minerals exploration and exploitation in collaboration with the Federal Government and partnership with investors as alternative sources of revenue generation.
Performance of the 2018 Budget

16. Mr. Speaker, Distinguished Members, Government envisaged revenue accruals of One Hundred and Seven Billion, Nineteen Million, Six Hundred and Eighty-seven Thousand, Four Hundred and Eighty-four Naira (N107,019,687,484) only. But as at October 2018, only Sixty-five Billion, One Hundred and Seventy-seven Million, Four Hundred and Thirty Thousand, Two Hundred and Eighty-three Naira (N65,177,430,283) was realized from Federation Account and Internally Generated Revenue (IGR). Also during the year under review, a total of N700 million was received as Budget Support Facility. In addition to the revenue accruals was the sum of N8.4 billion from Paris Club. In all, the sum of Seventy Four Billion, Two Hundred and Seventy-seven Million, Four Hundred and Thirty Thousand, Two Hundred and Eighty-two Naira, Sixty-five Kobo (N74,277,430,282.65) was realized. This represents 69.41% of the total expected revenue for 2018.

17. During the period under review, a total of Forty-nine Billion, Eighty-three Million, Five Hundred and Twenty-six Thousand, Four Hundred and Eighty-two Naira, Eighty-four Kobo (N49,083,526,482.84) only was spent on Recurrent items.

18. On the other hand, the sum of Twenty-three Billion, Seven Hundred and Sixteen Million, Four Hundred and Ninety-seven Thousand, Seven Hundred and Seventy Naira, Ninety-six Kobo (N23,716,497,770.96) only was spent on Capital Projects.

19. The Consolidated Revenue Fund Charges (CRFC) gulped the sum of Fifteen Billion, Four Hundred and Thirteen Million, One Hundred and Eighty-nine Thousand, Five Hundred and Fifty-seven Naira, Seventy-two Kobo (N15,413,189,557.72) only.

20. Despite the economic challenges facing the State, this Administration has continued to pursue policies, programmes and projects geared towards meeting the yearnings and aspirations of our people. Worthy of note are the massive urban and rural roads infrastructure construction, healthcare delivery, markets development, water and power supply, education and agriculture, among others. Most of these projects have been completed and commissioned during the year under review. However, the few remaining projects would be completed before the expiration of this Administration.
Fiscal Risk and State Government Financial Trend in 2018

21. The Rt. Hon. Speaker, it is pertinent to state that, over the years, Government had continued to make frantic efforts to reduce recurrent spending in order to make capital expenditures perform to optimal level. However, it is obvious that recurrent expenditures have continued to increase, resulting from increase in the wage bill, including pensions, gratuities, maintenance of security bases and newly employed staff in critical sectors. This fact has been an impediment to our efforts to improve on the capital spending. Notwithstanding, Government has been able to cut costs of governance through restructuring of the Ministries, Departments and Agencies (MDAs) and the number of political appointees, and paying attention to the maintenance culture, thereby bridging the gap between the recurrent and capital expenditures.

22. Consequently, recurrent expenditure accounted for about Forty-six percent (46%) of Government total spending against Thirty-three percent (33%) capital expenditure. Consolidated revenue fund charges, which comprised debt servicing, counterpart funding, pension and gratuities accounted for about Twenty-one percent (21%) in the 2018 fiscal year.

23. This Administration has continued to effectively manage our debt profile, keeping it at relatively moderate level. Government is, therefore, servicing only the first tranche of the Bonds collected in 2014, Federal Government infrastructure concessional loans, as well as some long term outstanding Development Partners facilities. All of these have relatively low interest rates with long term repayment periods.
The 2019 Fiscal Appropriation

24. The Rt. Hon. Speaker, Distinguished Members, let me remind you that the new accounting standard known as International Public Sector Accounting Standard (IPSAS) has been domiciled in the State. With modification and perfection of the necessary principles, Government will continue to pursue standards and systems that will continue to improve accountability, transparency and prudence in the management of Government resources. Mr. Speaker will recall that in line with this commitment, Government has domesticated the Fiscal Responsibility Law and Public Procurement Law aimed at strengthening transparency in Government business.

25. Honourable Members, Government’s focus in the 2019 fiscal year is as follows:
i. Sustenance of general security through security bases.
ii. Completion of all on-going projects started by this Administration;
iii. Encouraging and supporting agricultural production as a way of empowerment, boosting production, developing value chain and strengthening commercial venture for a stable economy;
iv. Creating conducive environment for the participation of the informal sector in income generation and sustainable productivity. In addition, it is also to attract investors to the State in order to boost employment opportunities for our teeming youths;
v. Government will continue to work closely with security agencies to promote protection of lives and property. The unfettered peace being enjoyed by our people would be sustained with continued commitment of resources so as to improve socio-economic activities.

26. Government will not relent in its determination to strengthen internal control mechanism in financial management. By so doing, Government will strictly monitor activities of Ministries, Departments and Agencies (MDAs) in line with the fiscal expenditure framework of this Administration. This will further sustain our resolve for transparency and accountability in view of our lean resources. The adoption of Treasury Single Account (TSA) will also promote the fiscal discipline as this will block all financial leakages in our various operations.

Parameters and Basic Assumptions of the 2019 Budget
27. The fluctuations in the Statutory Revenue Allocation from the Federation Account have to a large extent influenced the drawing up the 2019 budget. This is in view of the fact that it remains the major source of revenue accruals to the State. We are also mindful of the fact that we have not yet reached the desired peak of our IGR contribution to the State revenue. However, this Administration is determined to pursue vigorously all other sources of revenue due to government and collect same at minimal cost. To achieve this objective, the Board of Internal Revenue is collaborating with some consulting firms to recover stamp duty tax and related taxes due to the State to boost our IGR performance.

28. The following basic assumptions have been used as our guiding principles for the 2019 budget:
i. Government intends to pursue all revenue due to the State from various sources which include taxes, refunds, recoveries and other bank duties. The 2019 budget is, therefore, streamlined along this basic assumption and would require the collaboration of all and sundry with a view to achieving our laudable targets;
ii. This Administration is determined to achieve economic growth through prudent management of resources and investment in areas that have direct bearing on the lives of the citizenry. This will go a long way in sustaining the level of socio-economic development already achieved by this Administration.

Anticipated Revenue Receipts in 2019
29. Mr. Speaker, Honourable Members, the total expenditure outlay of the 2019 estimate is in the sum of Eighty-six Billion, Six Hundred and Forty-two Million, Five Hundred and Ninety-nine Thousand, Two Hundred and Twenty-five Naira (N86,642,599,225) only.

30. Government also intends to leverage on the available capital market for a N5 billion bond to balance up the deficit in the 2019 budget.

31. The 2019 Appropriation anticipates a total of Eighty Billion, One Hundred and Sixty-five Million, One Hundred and Ninety-three Thousand, One Hundred and Ninety-six Naira (N80,165,193,196) only. As I mentioned earlier, the deficit will be financed by a Bond facility and the 2019 opening balance.

32. The budget framework shows a decrease of Sixty-two
Billion, Seventy Million, One Hundred and Fifty-six Thousand, Two Hundred and Seventy Naira (N62,070,156,270) or 58.26% decrease as against the 2018 appropriation. The idea behind the decrease is to enable Government maximize usage of scarce resources at hand for maximum impact in line with our exit plans, and a breather for the coming administration. Details of these amounts are contained in the estimate’s document which I shall lay before you.

33. The Rt. Hon. Speaker, Honourable Members, as you are aware, this Administration is exiting within the implementation of the 2019 appropriation law. However, we intend to solidify the foundation laid by this Administration since 2011 by providing adequate funds to complete the on-going projects within our limited resources. It is in this regard that we christen the 2019 Appropriation, “Budget of Transition”.

34. Accordingly, the budget is to be funded from the following anticipated revenue sources:
A. Opening Balance of N1.4 Billion;
B. Federation Account:
i. Statutory Revenue Allocation of N37.0Billion;
ii. Value Added Tax (VAT) of N12.0 Billion;
iii. Exchange Gain of N1.5 Billion;
iv. Special Allocation of N1.5 Billion;
C. Internally Generated Revenue (IGR) of N20.82Billion;
D. Aid and Grants of N7.34 Billion;
E. Bond Facility of N5.0 Billion;

EXPENDITURE ESTIMATE FOR YEAR 2019 BUDGET
Recurrent Expenditure
35. A total of Forty-eight Billion, Four Hundred and Twenty-nine Million, Nine Hundred and Thirty-four Thousand, Thirty-nine Naira (N48,429,934,039) only representing 55.90% of the budget is earmarked for Recurrent Expenditure.
Capital Expenditure

36. The sum of Thirty-one Billion, Thirty-eight Million, Nine Hundred and Ninety-four Thousand, Forty-six Naira (N31,038,994,046) representing 35.82% of the total budget is earmarked as Capital Expenditure for the year 2019.
Consolidated Revenue Fund Charges

37. Similarly, the sum of Seven Billion, One Hundred and Seventy-three Million, Six Hundred and Seventy-one Thousand, One Hundred and Forty Naira (N7,173,671,140) has been allocated to Consolidated Revenue Fund Charges for debt servicing, pension and gratuity. This represents 8.28% of the total budget.
2019 Total Budget Size

38. The Rt. Hon. Speaker, Honourable Members, I am delighted to lay before you a total budget size of Eighty-six Billion, Six Hundred and Forty-two Million, Five Hundred and Ninety-nine Thousand, Two Hundred and Twenty-five Naira (N86,642,599,225) only for the 2019 fiscal year.

Sectoral Highlights
39. On the whole, the 2019 appropriation for the various sectors is as follows:
a) Administrative Sector:
o General Administration/
Legislation - N13.49 billion
o Pension & Gratuity - N2.30 billion
o Information & Culture- N0.57 billion
o Civil Service Matters - N0.61 billion
Sector Sub-Total - N16.97 billion

b) Economic Sector:
o Agriculture - N1.90 billion
o Finance & Investment - N9.00 billion
o Works, Housing and Urban
Development - N12.16 billion
o Water Resources & Rural
Development - N1.30 billion
o Lands & Physical Planning - N11.0 billion
Sector Sub Total - N35.36 billion
c) Law & Justice Sector:
o Judicial Service Commission-N0.187 billion
o Ministry of Justice - N0.484 billion
o Courts of Justice - N2.28 billion
Sector Sub Total - N2.95 billion
d) Social Sector:
o Education - N18.44 billion
o Health - N9.46 billion
o Youth & Sports
Development - N0.766 billion
o Women & Social
Development - N0.273 billion
o Environment &
Solid Minerals - N0.525 billion
Sector Sub Total - N29.46 billion

40. The Right Honourable Speaker, Honourable Members of this Hallowed Chamber, this Budget is predicated upon our collective determination to sustain the pace of development in our dear State. In this regard, and to achieve the success of this appropriation, therefore, we have the onerous task of brazing up to the challenges ahead of completing all on-going projects. We have the task of strengthening our partnership to enable us realize our desired ambition of bequeathing a legacy that will be a fulcrum for the in-coming administration to build on in order to take Nasarawa State to the next level.

41. The Rt. Hon. Speaker, Distinguished Members, let me conclude this speech by calling on our citizens to renew their commitment to peace and harmony. Particularly, I reiterate my call for all and sundry for a peaceful participation in the forthcoming general elections. In doing so, we will be seen to play our role in securing a society with harmonious and peaceful co-existence. On our part, Government will continue to provide conducive atmosphere for socio-economic and political activities to thrive. We shall also work closely with the law enforcement agencies to ensure that every part of Nasarawa State is secured. I also call on all citizens of Nasarawa State to consider themselves as part and parcel of the security infrastructure in the State.

42. On this note, Mr. Speaker, Honourable Members, it is my honour to lay before this Honourable House the 2019 Appropriation Bill tagged Budget of Transition for your kind consideration and speedy passage.

43. Thank you and God bless Nasarawa State.