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Rivers State 2019 “Budget of Sustainable Growth and Development.”

By Governor Nyesom Ezenwo Wike

Mr. Speaker, Honourable Members, distinguished guests, ladies and gentlemen.

2.     I thank God for the opportunity, once again, to present this budget address as the Governor of our State. I am most grateful to the people of Rivers State for the honour and privilege of piloting the affairs of the State for the last three and half years.

3.     Mr. Speaker, this is the last budget statement of our administration before the end of our first term in office. Permit me therefore to take a few moments to reflect on our performance.

4.     Never for a moment did we betray this trust; neither did we take the interest of our people for granted. We’ve remained faithful, truthful and just to their aspirations and even those who never gave us a chance when we started now admit that we’ve done well and believe strongly that things can only get better for our State under our watch.

5.     When we came in three and half years ago, we met a State that was literarily on its knees: physically battered, economically raped and psychologically traumatized.

6.     But we came in with a clear vision and mission: a vision to repair and renew the promise of our State; a mission to pull our people from the cesspool of despair and restore our hopes for brighter future.

7.     Three and half years after, we have substantially achieved our commitments on all directions of human advancement.

8.     Under our watch, Rivers State has emerged from the brink of economic disaster to an era of fiscal sustainability.

9.     Today, our Gross Domestic product has increased and our economy is growing at a rate above the national average and attracting new investments even when the national economy continues to be weak, wobbly and troubling.

10.   Under our guardianship, we have invested at record levels to provide critical social and economic infrastructure across the State; especially roads, schools, and health facilities.

11.   In the process, we created hundreds of thousands of jobs across the construction value chain.

12.  We supported small businesses with interest free loans, tax moratoriums and other tangible investment incentives. Today, Rivers State has become economically competitive and businesses, including new start-ups, are responding positively to the improved investment conditions in the State.

13.   We prioritized the construction and expansion of road infrastructure and today, we have successfully delivered over 1600 kilometers of roads across the State.

14.   Three and half years ago, we could hardly find any tarred street without deep cracks and potholes across the State. Today, that has become a thing of the past.

15.   There is no Local Government Area we have not reached; no State or Federal Constituency we have not touched; and no Senatorial District we have not positively affected with our development policies, programmes and projects.

16.   In the areas of urban renewal and rural development, we have constructed and reconstructed several roads in Port Harcourt city, Obio/Akpor Local Government Area, Omoku, Elele, Isiokpo, Okochiri, Ogbunabali, and Amadi Ama communities.

17.   The numerous roads and other social amenities, including water, electricity, jetties, land reclamation we have provided are boosting socio-economic activities and improving the wellbeing of our people in several of our rustic and hitherto neglected communities across the State.

18.   It is a thing of joy and profound sense of fulfillment that for the first time in history the people of Opobo can now access other parts of the State on a tarred road as a result of our efforts to fulfill our promise.

19.   As critical components of human capital development education and healthcare delivery also received appreciable attention in the last three and half years of our administration.

20.   We have comprehensively rehabilitated, furnished and equipped over 180 basic education schools through the State’s Universal Basic Education Board.

21.   Also, several secondary schools have been rebuilt and expanded while a lot more are presently undergoing total reconstruction and rehabilitation.

22.   In 2018 we trained over 1000 teachers on 21st century education skills to improve the quality of teaching and delivery of lesson notes in our basic education schools. More teachers will be trained in the course of 2019.

23.   Furthermore, we have expanded access and improved quality in all our tertiary institutions. New faculties buildings, have been built and equipped for the Rivers State University; the Ignatius Ajuru University of Education and also in the two State-owned Polytechnics.

24.   We also provided grants to all the tertiary institutions to upgrade their facilities, upwardly adjusted the salary structure of both teaching and non-teaching staff of our universities and ensured the regular payment of staff salaries.

25.   Furthermore, the School of Midwifery has been comprehensively rehabilitated while the College of Nursing and that of Health Technology have been listed for reconstruction in the next fiscal year.

26.   With respect to healthcare, we are gradually getting closer to actualizing our commitment to providing an affordable, effective and efficient healthcare delivery system for our people.

27.   To this end, the 13 general hospitals and the mother and child hospital we have comprehensively rehabilitated and or constructed will soon be equipped and put to effective use.

28.   We are transforming and equipping the Braithwaite Memorial Hospital with the most advanced diagnostic and other equipment for the treatment of hearth, liver and kidney diseases.

29.   We are also going on with the construction of the regional referral hospitals we inherited from the previous administration to bring access to tertiary healthcare closer to our people.

30.   Finally, we also fought and reduced the monstrous heights of insecurity and our State is today reckoned as one of the most peaceful, safe and secure States in the country.

31.   Mr. Speaker, these are just highlights of some of the development strides we recorded in the last three and half years of our administration to lay, strengthen and consolidate the foundations for the future of our State.

32.   Collectively, we are all focused and committed to building a State where no one or section is left out from the benefits of progress; a society where everyone has a fair chance to pursue set goals and realize their potential; a society where everyone is educated, economically empowered and physically secured enough to live a peaceful, fulfilling, healthy, and meaningful life.

33.   But as you know, social transformation is like a journey; it takes time to fully manifest and benefit the entire populace.

34.   Yes, we have made significant progress in the last three and half years of our administration. But there is still a lot to be done to get to where we want our State to be.

2018 BUDGET PERFORMANCE REVIEW

35.   Mr. Speaker, Honourable Members, and distinguished guests. In the 2018 fiscal year, the projected revenue for the State was 510,000,000,000.00 (Five Hundred and Ten Billion Naira) only.

36.   Out of this sum 152,000,000,000.00 (One hundred and fifty-two billion was projected from internal generated revenue, (IGR) while statutory allocation (FAAC) was estimated at N210, 000,000.000.00 (Two Hundred and Ten Billion naira) only. Therefore aggregate projected revenue from IGR and FAAC was N362, 000,000,000.00 only.

37.   We also projected to source the sum of N148, 000,000,000.00 from other sources, including internal and external loans.

38.   As at November 2018 total revenue receipts from all sources (except internal and external loans) stood at 288,721,423,336. This represents about 79 per cent performance on the revenue side with respect to the totally projected IGR and FAAC receipts for 2018.

39.   It is worthy of note that while internally generated revenue for 2018 improved marginally over that of 2017, what was realized was about 32 per cent less than the total amount projected for the fiscal year 2018.

40.   This means that we still have serious challenges in meeting our IGR targets, a situation we must collectively find ways to overcome if we must deliver on our development targets to the people.

41.   On our part, we shall continue with our efforts to stimulate economic growth, diversify the economy and attract more investments to shore up the State’s revenue base.

42.   It is also worthy of note that the 2018 budget was financed principally from proceeds from IGR, FAAC, Paris Club Refund and dividends from the State’s stock portfolio. We literally refused to borrow in order to encourage us to live within our means as well as achieve appreciable levels of fiscal sustainability.

43.   On the expenditure side, we prudently managed and applied the available resources to deliver on the mandates of the 2018 budget.

44.   For instance, in spite of the shortfall in aggregate revenue, we substantially funded our recurrent expenditure, including the regular payment of salaries, pensions and the release of overheads to ministries, departments and extra-ministerial agencies (MDAs).

45.   Also, aggregate capital releases to MDAs as at November stood at over 65 per cent of the total capital expenditure. As you may have noticed, we completed and delivered over 30 capital projects in 2018 during the 3rd anniversary of our administration, including:

·        Slaughter – Trans Amadi – Garrison road;

·        Abuloma – Woji – Elelenwo – Akpajo

·        Obiri ikwerre – Airport road;

·        Elele Alimini internal roads;

·        Omoku internal roads;

·        Cardinal Jim Rex-Lawson Cultural Centre;

·        Amadi Ama internal roads;

·        Dr. Peter Odili Doctors’ Quarters (BMSH);

·        Chief Emmanuel Aguma House;

·        Dame Patience Jonathan road (former creek road);

·        Bishop Johnson Street;

·        Captain Amangala Street;

·        Tourist Beach road;

·        Birabi Memorial Grammar School, Bori;

·        General Sanni Abacha Road;

·        Mbuoshimi Community Health Centre;

·        Mgboshimini Community Primary School;

·        P.G. Warmate House (Former Waterlines Building);

·        Ozuaha – Ipo – Omademe road;

·        Traditional Council Secretariat;

·        National Industrial Court Building;

·        Court of Appeal Building;

·        Okochiri Internal roads;

·        Isiokpo internal roads (phase 1);

·        24 nos 3 Bedroom flats for civil servants;

·        Government Girls Secondary School, Rumuokuta;

·        Nyemoni Grammar School, Abonnema;

·        Government Secondary School, Onne;

·        Faculty of Sciences and Technical Education building, Rivers State University;

·        Faculty of Management Sciences building, Rivers State University;

·        Faculty of Medical Sciences Building, Rivers State University;

·        SUBEB Head Office complex, Port Harcourt; and

·        Ogbunabali internal roads

46.   From all assessments the policy objectives of the 2018 budget circle on expenditure targeting, spending prioritization and effective implementation were substantially achieved.

ECONOMIC AND FISCAL OUTLOOK FOR 2019

47.   Mr. Speaker, few days ago, Mr. President told a nation in distraught that the national economy is in real bad shape.

48.   Mr. President’s frank but hopeless assessment of the national economy was predicated on the continuous decline in national revenue, which has created uncertainty in the country’s fiscal conditions.

49.   Ordinarily, we should all be worried over the gloomy picture of the national economy because the health of our economy is tied substantially to the strength of the national economy.

50.   However, we have taken adequate measures to guarantee the medium and long-term sustainability of our economy and reduce the State’s exposure to the shocks and volatilities of the national economy, except if it goes on a free fall.

51.   Against this background, I wish to assure us that no matter what happens to the economy at the national level, the growth outlook for our State’s economy remains positive in the short to medium term.

52.   We shall continue to reset our economy by maintaining expansionary fiscal approach, prioritizing investments in critical socio-economic infrastructure and taking appropriate measures to boost revenue generation to meet our development objectives, priorities and targets.

THE 2019 BUDGET ESTIMATES

53.   Mr. Speaker, Honourable Members; the projected revenue for Rivers State for the 2019 Fiscal Year is N480, 000,000,000.00 (Four Hundred and Eighty Billion Naira) only.

54.   The budget is based on the following assumptions:

(i)                  an oil price bench mark of 55 United States Dollars per barrel, which is 5 dollars lower than that of the Federal Government; and

(ii)                an oil production rate 2,000,000 barrels per day, as against the Federal Government’s 2,300,000.000 barrels per day; and

(iii)               an inflation rate of 10.9 per cent as against the Federal Government’s 9.9 per cent.

55.       The strategic thrust for the 2019 budget is to promote economic growth and diversification, create jobs and reduce unemployment; take as many of our people out of poverty and improve the standard of living of Rivers State.

56.   To this end, we shall be doing the following specific things:

(i)                  prioritize investments in agriculture and encourage, train and support our youths to go into commercial farming;

(ii)                support small and medium businesses to invest in the State and create jobs;

(iii)               continue to prioritize and invest in human capital development and guarantee robust access to basic social services such as, education, healthcare, social housing, water and sanitation;

(iv)               continue to keep Rivers State peaceful, safe and secure;

(v)                 continue to prioritized investments in the provision and expansion of transport infrastructure, including roads, bridges and jetties.

57.   Against this background, the 2019 Budget is aptly christened: “Budget of Sustainable Growth and Development.”

FINANCING THE 2019 BUDGET

58.   Mr. Speaker, Honourable Members, distinguished guests, ladies and gentlemen, funding for the 2019 budget will be from the following sources:

S/N

Source

Projected revenue

1

Internally Generated Revenue

N120, 492,891,302.00

2

Statutory Allocation

   N73, 169,813,022.00

3

13% oil minerals fund

N145, 070,991,780.00

4

Value Added Tax

   N26, 377,628,543.00

5

Refunds

N27, 337,926,155.08

6

Local Credits

N45, 000,000,000.00

7

International Credits

N30, 000,000,000.00

8

Capital receipts

       N300, 000,000.00

9

Exchange gain

    N8, 000,000,000.00

10

Prior year Balance

    N4, 662,073,844.92

11

TOTAL

N480, 411,324,647,00

59.   At about 28.39 per cent of total revenue, Oil Mineral funds is the largest contributor to the budget and what is proposed in the 2019 budget represents a significant increase from that of 2018 as we expect the Federal Government to implement the recent judgment on the upward review of our entitlements under the relevant Production Sharing Agreements.

60.   The IGR is the second highest contributor to the budget as the sum proposed represents about 25 per cent of the total budget.

61.   We decided to be as realistic as possible with our IGR projections because over the years we have been unable to match our revenue potential with actuality.

62.   Nevertheless, we are encouraged by the constant improvements we have recorded year in, year out to continue with our drive to generate more revenue from alternative internal sources to fund substantial parts of our budget.

63.   While we may not introduce new taxes and levies in 2019, I have directed the State’s Internal Revenue Service to plug all existing tax loopholes, crack down on tax defaulters and ensure full implementation of our revenue laws to shore up our IGR collections.

64.   Furthermore, in addition to balancing the fairness of the tax system to enhance compliance, we will also continue with our efforts to increase the efficiency of revenue collection from both existing and other potential sources.

65.   The third most viable contributor to our budget is statutory allocation. Here, our projection is over 28 billion more than that of 2018 based on the assumptions of the Federal Government. However, we are mindful of the fact that this is a revenue item we have no control whatsoever over what can accrue to the State.

66.   Finally, we have substantially reduced our intention to fund the 2019 budget with borrowed funds in line with our policy of balancing our budget and reducing deficits to sustain the impetus towards fiscal responsibility.

PROPOSED EXPENDITURE

67.   Mr. Speaker, the proposed revenue for 2019 fiscal year will be spent as follows:

(1)    Recurrent Expenditure       –       N157, 122,354,564.15

(2)    Capital Expenditure           –       N323, 288,970,085.00

RECURRENT EXPENDITURE

68.   The Recurrent Expenditure will be spent as follows:

S/N

Expenditure Item

Amount

1.

Personnel Emolument

N79, 585,058,808.60

2.

Overhead

  17, 025,380,000.00

3.

Pension

  33,000,000,000.00

4.

Others

   27,511,915,255.55

69.   A substantial part of the recurrent budget proposed for 2019 is for the payment of staff salaries and overheads to ministries, departments and agencies to enable them effectively discharge their responsibilities to the people.

70.   The personnel cost of N79, 585,058,808.60 alone constitutes about 50 per cent of the entire recurrent expenditure. The increase in the figure for 2019 is as a result of the need to provide for the anticipated increase in the minimum wage for civil servants.

71.   With this, the State Government will be in a position to pay the minimum wage whenever the National Assembly approves it. We also made provisions for staff promotion arrears and new recruitments into the State’s civil service.

72.   The sum of 33,000,000,000.00 is proposed for the settlement of pension liabilities. The challenge about the plight of pensioners has lingered for too long and we are determined to tackle it this time around. Certainly, our senior citizens deserve better treatment than what they are presently getting.

CAPITAL EXPENDITURE

73.   The capital allocation of 323,288,970,085.00 for the 2019 fiscal year represents 65 per cent of the total budget. This sum is however less than the figure for 2018 by N57, 708,717,319.00 due to the reduction in the total size of the 2019 budget as against that of 2018.

SECTORAL ALLOCATION OF THE CAPITAL BUDGET

74.   The sectoral allocation of the capital budget is as follows:

S/N

Sector

Amount (Proposed)

1

Administration Sector

N17, 820,704,443.79

2

Economic Sector

N99, 053,565,640.20

3

Law and Justice Sector

   N 4,350,000,000.00

4

Social Sector

N127, 292,200,000.00

5

Special Heads

N50, 347,500,000.00

6

Loan Repayments

N24, 425,000,000.00

75.   Pursuant to our priorities for human capital development and infrastructural provision, a substantial part of the capital budget for 2019 is allocated to the Ministries of Agriculture; Education; Employment Generation and Empowerment; Health; Sports Development; Women Affairs; Works; and Youth Development.

76.   Furthermore, in line with our policy on project completion, we shall continue to give priority attention to the completion of ongoing projects.

77.   Accordingly, the Ministry of Agriculture has been allocated the sum of N4, 500,000,000.00 only, to:

·        complete the Datco Cassava Processing Plant,

·        revive some of the long abandoned State farms for privatization;

·        train, encourage and support our youths to embrace modern farming; and

·        provide extension services, farm inputs, and improved seedlings to farmers in the rural areas.

78.   The Ministry of Education has been allocated the sum of N40 billion to enable it to consolidate the ongoing efforts to improve access to quality education in the State.

79.   Specifically, the Ministry of Education is expected to spend part of its capital allocation to fund the completion of the reconstruction of the following schools:

·        Bonny National Grammar School, Bonny in Bonny Local Government Area,

·        Government Secondary School, Okarki in Ahoada West Local Government Area,

·        Community Secondary School, Ubima in Ikwerre Local Government Area,

·        Western Ahoada Central High School, Ahoada in Ahoada East Local Government Area,

·        Government Secondary School, Abua in Abua/Odual Local Government Area,

·        Community Secondary School, Bille in Akuku Toru Local Government Area,

·        Model Primary School, Emillighan in Abua/Odual Local Government Area,

·        Community Primary School, Oroworokwo,

·        Government Secondary School, Obuama in Degema Local Government Area;

·        Government Craft Centre, Port Harcourt; and

·        Seabed Model Primary School, Port Harcourt.

80.   Furthermore, contracts for the reconstruction of Model Secondary school Bakana in Degema Local Government Area; Model Secondary School, Tombia in Degema Local Government Area; and Omuanwa Community Secondary School in Ikwerre Local Government Area have also been awarded with funding provided for in the 2019 capital budget.

81.   Also, provisions have been made for the training and retraining of secondary teachers across the State to enable us achieve improved outcomes in our secondary schools.

82.   Similarly, provisions have also been made in the budget for the funding of the new campuses of the Rivers State University at Ahoada and Emouha Local Government Areas of the State; the award of government scholarships, as well as infrastructure support grants of 500,000,000.00 million naira to each of our tertiary institutions.

83.   A cumulative sum of 32,000,000,000.00 has been proposed for the Ministries of Employment Generation and Empowerment, Sports, Women Affairs and Youths Development.

84.   Together, these ministries are driving the State Government’s new push for job creation, human capacity development, and poverty reduction in the State.

85.   Each of these Ministries will therefore design and implement specific and targeted programmes to offer our youths and women relevant life-long skills and economic opportunities to be either self-employed, roundly employable or be an employer of labour themselves.

86.   We shall also sustain the implementation of the monthly N200, 000,000.00 and N100, 000,000.00 interest-free revolving loans initiative to small business and civil servants respectively.

87.   In addition, the Ministries of Sports Development and Women Affairs need to develop relevant infrastructure to enhance the development of our youths and women, such as the ongoing Real Madrid Football Academy, the Sports Academy at Etche, and the proposed Women Development Centre. Funding for these and other related projects forms part of the budgetary provisions for these ministries.

88.         Mr. Speaker, and Honourable Members, a well-developed and maintained road network is critical to the rapid socio-economic transformation of our State. Our administration has since prioritized the development of State roads and we intend to continue along this trajectory in the 2019 fiscal year.

89.   Accordingly we have proposed N72, 911,765,640.21 billion naira provision for the construction and improvement of the State’s road network and transport infrastructure.

90.   This sum, which constitute about 24 per cent of the total capital budget, will be utilized to continue with the funding of the construction and completion of the following roads, among others:

·        the dualization of Kira – Sakpenwa – Bori – Kono road;

·        the Andoni – Opobo Unity road;

·        the Oyigbo town – Ebete road;

·        Tema – Ifoko road

·        the Mbano camp road;

·        Eleme – Obete road;

·        Eteo – Sime – Bayayira-Nonwa-Kira road;

·        Rumuji – Ibaa – obele – isiokpo road;

·        Akabuka – Omoku road;

·        Flyover bridge at Garisson Junction;

·        Abonnema ring road;

·        Abua-Degema – Emoh-Iyak-Ighom-Elok road;

·        Ula Ehuda – Odioku – Anwunugboko – Ubeta – Ihuechi – Odiereke road;

·        Rumuche road in Emouha Local Government Area;

·        Flyover bridge at Rumuokwuta roundabout;

·        Flyover bridge at University of Port Harcourt Junction

·        Ahoada – Odiemerenyi – Ihugbogo-odieke road;

·        Isiodu roads

·        Ahoada – Ekpena road;

·        Omoku-Aligwu-Kreigani-Oduoboburu road;

·        Odieku internal roads;

·        Bolo internal roads;

·        Rumukpakani internal roads; and

·        Umuogba – Umuokpurukpu – Umueke – Umunju Umuelechi – Eberi roundabout link road.

91.   Also, the sum of 17,112,000,000.00 is proposed for the Bureau for Special Projects to fund the completion of ongoing projects, including:

·        land reclamation at Bakana in Degema Local Government Area

·        land reclamation at Abalama in Asari Toru Local Government Area;

·        land reclamation and shore protection at Kula in Akuku Toru Local Government Area;

·        the Secretariat buildings for Trade Union Congress, Nigeria Labour Congress, National Union of Rivers State Students and Rivers State Students Union Government; and the

·        the Fruit Garden market in Port Harcourt City Local Government Area.

92.   Furthermore, the Ministries of Housing and Transport have allocations of N1,127,700,000.00 and N3,000,000,000.000 respectively to complete ongoing vital projects such as the ultra modern Judges residential quarters, the new mile one market complex and the expanded Bonny/Bile/Nembe jetty and park.

93.   Mr. Speaker and Honourable Members, the provision of adequate, affordable and effective healthcare services remains one of the major priorities of our administration. We have from inception invested billions of naira to achieve our vision and mission statement on healthcare delivery but we are not there yet.

94.   We have therefore allocated the sum of N25, 300,000,000.00 to fund healthcare delivery in the State. Specifically, this money would be applied to complete, equip and deliver:

·        the 13 general hospitals under reconstruction;

·        the 5 regional referral hospitals under construction at Ahoada in Ahoada-East Local Government Area, Bori in Khana Local Government Area, Degema in Degema Local Government Area; Okehi in Etche Local Government Area and Omoku in Ogba/Egbema/Ndoni Local Government Area;

·        the Braithwaite Memorial General Hospital Port Harcourt under reconstruction to serve as the Rivers State University Teaching Hospital;

·        the Mother and Child hospital in Port Harcourt;

·        the Rivers State College of Health Science and Technology as well as the School of Nursing Port Harcourt under reconstruction; and the

·        primary healthcare health centres under construction or rehabilitation across the State.

95.   Mr. Speaker and Honourable Members, as expected of us, we will continue to give security of lives and property all the attention that it deserves in spite of the obvious lack of cooperation from the Federal Government.

96.   Accordingly, the sum of 18,000,000,000.00 has been proposed to fund all aspects of securing and keeping Rivers State safe, peaceful and secure, including the operationalization of the recently established State Neighbourhood Safety Corps programme.

97.   The Neighbourhood Safety Corps programme is very dear to us as a government. Apart from the number of youths that it will employ, the programme has the potential to enhance our collective security. And so we are prepared to do whatever it will take to ensure its implementation in the course of 2019.

98. In addition, our commitment to speedy, effective and efficient justice delivery remains strong. It is for this reason that we have proposed the sum of N4, 350,000,000.00 only for the Law and Justice sector to further strengthen and enhance the justice delivery system in the State and realize our policy objectives in this regard.

Conclusion

99.   Mr. Speaker, Honourable Members, distinguished guests, ladies and gentlemen; over the last three and half years, we have been working together to deliver on our promises to the people and move the State foreword.

100. We may not have achieved all that we set out to actualize not for lack of commitment and determination but due largely to the constraints imposed on us by limited resources.

101. However, looking back we are proud of what we have accomplished as a Government and as a State. Believe it or not, we have redefined the course of governance and Rivers State is changing for the better by each passing day.

102. The 2019 budget we are prosing is intended to consolidate on our achievements and enable us to put the State on an irreversible path to sustainable economic growth and development.

103. Our record of financial responsibility clearly indicates that this budget will deliver more dividends of democracy to our people as it has something good for everyone, for every business and for every community in Rivers State.

104. Mr. Speaker, I therefore commend this budget to the House of Assembly for your consideration and speedy passage.

105. Thank you. God bless you all, God bless Rivers State.

▪2019 BUDGET STATEMENT BY HIS EXCELLENCY NYESOM EZENWO WIKE CON, GSSRS, POS GOVERNOROF  RIVERS STATE, TO THE RIVERS STATE HOUSE OF ASSEMBLY  ON MONDAY 24 DECEMBER 2018.

AmarSim Associations Development Consultants

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