2017 RIVERS GOLDEN JUBILEE BUDGET FOR ACCELERATED DEVELOPMENT

REVIEW OF THE 2016 BUDGET

▪In 2016 we proposed a total revenue projection of N307, 000,000,000, to be funded by the Federation Accounts Allocation Committee revenue receipts of N115, 000,000.00, the 2015 closing balance of N16.1 billion, a total credit of N52 billion, and Internally Generated Revenue (IGR) of N120, 000,000,000.

▪ The N115 billion Federation Account receipts proposed for the year 2016 was made up of Statutory Allocation of N30.8 billion, 13% Mineral Fund of N69.1 billion, Value Added Tax (VAT) of N11.3%, NNPC refunds of N1billion, Exchange gain of N2.3 billion and Capital receipt of N0.4 billion.

▪ However, as at September this year, we realized N92.5 billion out of the N115 billion expected from the Federation Allocation Accounts for the year, representing 80.5% in terms of actual budget performance. Similarly, we realized N73.5 billion of IGR collection out of the N120 billion proposed for the year, representing 61.3% in terms of actual budgetary performance.

▪ Out of the N235 billion aggregated FAAC and IGR revenue proposal in 2016, we recorded N166.1 billion actual receipts as at the end of September, representing 70.6%, amounting to over 73% of the total revenue performance for the year 2016.

▪ Further breakdown showed that a total of N120 billion was approved for recurrent expenditure out of which the sum of N55 billion was to cater for salaries, N18.1 billion for the payment of pension and gratuity while overhead cost stood at N14.5 billion.

▪ However, actual expenditure indicated that N58, 867,099,782.17 representing 31.3% of the total recurrent expenditure was spent on salaries, N9, 755,554,089.00 representing 5.2% of the total recurrent expenditure was expended on overhead, while 11,448,686,908.20 had been spent on pensions as at September 2016.

▪ This means that apart from the overrun on salaries, the expenditure for the payment of pensions and overhead cost was below the approved values. On the aggregate, the sum of N76, 313,624,479.21, representing 63.59% of the approved sum has been spent on recurrent expenditure as at September 2016.

▪ With regards to capital expenditure, the sum of N187 billion was approved for the 2016 financial year, with the following sectoral allocations: 15.5% or N29,042,275,000 was allocated to the Administration Sector, 29.1% or N76,326,194,480 was allocated to the Economic Sector, 0.41% or N770,000,000 went to Law and Justice Sector and 28.4% or N53,207,500,000 to the Social Sector.

▪The significant increase in the capital expenditure as compared to the recurrent expenditure was indicative of our commitment to stimulating economic growth and development through substantial investments in infrastructure with its multiplier effects on other sectors of the economy.

▪ However, out of the approved aggregate capital expenditure, what was actually expended as at October 2016 was 107,649,716,589.21, representing 63.3% of the approved sum for 2016.

▪On the aggregate, the 2016 budget recorded about 60 per cent performance, which was a significant improvement over 2015, although it should have been better.

THE 2017 BUDGET PROJECTIONS

Projected revenue projection for 2017 financial year is N470, 000,000,000.00 (Four Hundred and Seventy Billion Naira) only.

Budget's basic principles:

▪ First, enhancing the business environment, including tackling the security challenges for the private sector to grow, expand our tax revenue base, and drive our economy through the value chain into becoming one of the largest economies in West Africa;

▪Second, committing a greater proportion of available resources towards infrastructure development and public works to stimulate economic growth, create employment and reduce poverty;

▪ Third, scaling up resources to improve the quality of education and health care delivery throughout the State with a view to enhancing the educational and health needs of our people;

▪ Fourth, creating economic opportunities for our youth and women and empower them to exploit and participate in the economic development of the State; and

▪ Fifth, strengthening governance systems for a balanced development and efficient service delivery.

Financing the 2017 Budget

▪ Mr. Speaker, the 2017 budget will be funded from revenue receipts from: (i) the Federation Account Allocation Committee (FAAC), (ii) the 13% Derivation proceeds, (iii) Value Added Tax (VAT), (iv) Reimbursements, (v) Internally Generated Revenue (IGR) and (vi) Domestic credits.

▪ We are projecting an aggregate sum of N220, 000,000,000.00 (Two hundred and Twenty billion naira) from FAAC, distributed as follows: N23 billion naira from Statutory Allocation. N102 billion naira from 13% mineral derivation fund, N16.6 billion naira from VAT, N8 billion exchange gain, N70 billion for Paris Club and other reimbursements, and N400 million naira from capital receipts.

▪ We are also projecting to generate an aggregate sum of N168, 857,926,276.00one hundred and sixty-eight billion, eight hundred and fifty-seven million, nine hundred and twenty-six thousand, two hundred and seventy-six naira) from IGR..

Recurrent Expenditure

▪ The breakdown of the proposed budget shows that a total of N141, 000,000,000.00 (one hundred and forty-one billion naira) is proposed for recurrent expenditure. Out of which the sum of N62 billion naira is earmarked for personnel emolument, N20 billion naira is for the payment of pensions and gratuities, overhead costs is expected to gulp N17 billion naira, while N3billion will be used to service FGN Bonds.

Capital Expenditure

▪ The total projected capital expenditure for 2017 is N329 billion (three hundred and twenty-nine billion naira) only, which represents 70% of the capital estimate to the projected budget volume and gives a capital to recurrent expenditure ratio of 70:30.

▪ In terms of sectoral allocation, the projections shows that N14.160 billion is allocated to the administrative sector; N115.245 billion is allocated to the economic sector, N125.630 billion s allocated to the social sector, while N3.050 billion is allocated to the Law and Justice sector; and N70.915 billion is allocated to special heads.

▪ The unprecedented increase in the capital expenditure, once again, underscores our commitment to direct substantial resources to the critical growth sectors of our economy, including addressing infrastructure gaps to accelerate economic growth, secure the State and improve the wellbeing of our people.

PRIORITIES OF THE 2017 BUDGET

▪ As indicated above, the 2017 budget strategy is designed towards aligning expenditures to priorities that best support our economic transformation agenda. Accordingly, the following priority areas will receive preferential call on all our revenues for 2017:

· Security of lives and property;

· Infrastructure development and maintenance;

· Education,

· Healthcare delivery, and

· Empowerment.

Security of life and property

▪. Tackling insecurity and reducing the crime rate to the lowest minimum remains one of our top priorities.

×Another 40 pickup vehicles, six Armored Personnel Carriers and ten Gunboats, which we intend to deliver to the security agencies to enhance their capacity to provide adequate security cover for the State.

▪N15, 000,000,000.00 to the security sub-sector in the 2017 budget to be used to improve the existing security architecture, including the provision of logistics to enhance the capacity of the security agencies to investigate, monitor, identify and track down criminals and secure the State for all of us to live in peace and security.

Accelerating infrastructure development

▪We have allocated the sum of N77,409,275,000.00, representing nearly 40 per cent of total capital expenditures to the Ministry of Works to accelerate the development and expansion of infrastructure throughout the State in 2017.

Provision of quality education

▪We have allocated the sum of N30 billion to the Ministry of Education for 2017 to invest in providing educational infrastructure and improving the quality of education in the State

Quality and Efficient Healthcare Delivery

▪We have allocated N27 billion in the 2017 capital budget to the Ministry of Health to enable us achieve our objectives for efficient and affordable healthcare delivery in Rivers State.

Enhancing Women and Youth Empowerment

▪Empowerment Scheme with an initial capital of N1, 000,000,000.00.

▪ In addition, we have allocated a cumulative sum of N12, 000,000,000.00 in the 2017 budget to the relevant line ministries to implement various youth and women development and empowerment schemes, including the building of women development centre and a football academy.

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▪2017 Budget Presented to the Rivers State House of Assembly on 28th December, 2016 for consideration, passed by the House and assented to by Rivers State Governor, Nyesom Ezenwo Wike (CON, GSSRS) on 13th February, 2017.

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