BY AUSTIN UGANWA
The Imo House of Assembly complex was filled to capacity Wednesday,
November 27 as the State Governor, Rt. Hon Emeka Ihedioha presented the
2020 fiscal framework to the lawmakers. Several Imo people thronged to
the place to witness the event being the first time the new government
is providing its budgetary roadmap and therefore significant in many
respects. Cheers, sustained applause greeted Ihedioha as his voice rose
and fell in perfect harmony and symmetry as he delivered the 40-minute
budget speech.
Tagged: “Rebuild Imo- Budget One” he provided crisp insight into the
Appropriation Bill. “The proposal is aimed at restoring confidence in
government and our people, rebuilding our dilapidated infrastructure and
putting the State on a pedestal for sustainable economic development”.
According to him, the critical and specific areas of focus would
include: Road infrastructure, improving on the ‘ease of doing
business’ and social services such as education, healthcare delivery
system, water, sanitation and similar others.
The budget proposal drew on some basic macro-economic assumptions. One,
that the oil price benchmark will not only remain at US$57 per barrel
in 2020 but that the daily oil production estimate of 2.18 m bpd and
the exchange rate of N305 per US Dollar would be sustained through next
year. Moreover, that the inflation is expected to remain slightly above
single digits in the next fiscal year and the increase of Value Added
Tax rate from 5% to 7.5% which translates to more revenue to government.
The total budget proposed by the state government is N197.60b with the
capital expenditure taking a larger cut of N 106.22 b than the recurrent
expenditure’s figure of N 91.33b, representing 53.8 percent and 46.2
percent respectively. A further breakdown of the budget indicates
markedly that the Ministry of Works takes the largest share of the
Capital budget with N41.31b.
One of the most enthralling realities about the 2020 Imo fiscal
framework is evident in the capital outlay overshooting the recurrent
spending. This is unlike most government budgets including the 2020
Federal Government Budget which squeaks under the heavy weight of
excessive recurrent expenditure structure. For instance, the Federal
Government’s 2020 capital expenditure proposal which was presented to
the joint session of the National Assembly a couple of months ago is
N2.46T while the projected recurrent expenditure is put at aggregate sum
of N4.026T with the personnel costs gulping N3.6T and the overhead
costs N426b. In comparable terms, the recurrent expenditure is N1.556T
over and above the capital vote.
Understanding that capital votes are essentially used to fund projects
the consequence is that higher capital votes resonate greater
infrastructural development and economic growth. This explains why the
path undertaken by the Imo administration is strikingly healthy and
instructive of a government dedicated to wealth creation and economic
sustenance desirable to stimulate composite state growth and
advancement.
However, the priority attention Ihedioha’s administration has accorded
the infrastructural sector in the budget and the lion share projected
allocation of N41b to the Ministry of Works are logical and
understandable. Although on assumption of office May 29, Ihedioha
inherited a ruined state, the infrastructural sector particularly roads,
electricity and potable water have remained the worst hit on account of
years of neglect and substandard projects executed by the past
administration. It is generally known by Imo people that inter and intra
cities roads are in dilapidated state and made worse by the rains that
are just giving way for the dry season.
Over the past six months the new government has evidently made concerted
efforts towards reclaiming and restoring the infrastructure base of the
state. Accordingly the government has commenced an ambitious
rehabilitation and reconstruction of 25 roads projects across Imo. Over
85 percentage of the contractors have been mobilized to sites and work
has evidently and earnestly commenced. Besides, the government recently
awarded portions of five federal roads leading into the State capital.
The roads are: Owerri-Orlu, Owerri-Okigwe , Owerri-Obowo , Owerri-Aba
and the Owerri-Port Harcourt Road. A total cost of N40b according to the
governor is earmarked for the roads projects
On the recurrent side, N8b was projected for personnel costs, N 6b
far below the last year’s N15.3b. This is surprising given the
increase in the workers’ salary and monthly payment of pension
undertaken by Ihedioha administration. The reduced personnel cost has
been attributed to the ongoing reform in the civil service which
includes the enthronement of accountability, transparency and due
process
On the contrary, the climbed overhead costs from last year’s N18.9b
to N34.7b may well find justification in the increased volume of
government activities arising from the consolidated nature of the
rebuild process. For instance, Ihedioha who has umpteenth time noted
his administration’s hurriedness to rebuild the state has accordingly
set up various committees, units, panels and agencies towards
accomplishing the government’s objectives. The result is heightened
rate of government’s functions and a corresponding pressure on the
overhead costs.
With N36.4b Internally Generated Revenue projection, the 2020 fiscal
year’s IGR is intended to surpass that of 2019 figure of N25.5b by a
whopping N10.9b. The reason is largely penetration and not far-fetched.
The introduction of the Treasury Single Account in August this year
through the ratification of Executive Order 5 by the governor has had
tremendous impact on the blockage of revenue generation leakages. The
result is that since the past four months, the Imo IGR has been on a
steady increase culminating in about 400 percent rise as at November
ending. With the 2020 fiscal framework designed to drive the economic
sector, commercial agriculture, ease of doing and investment, the IGR is
expected to pull higher and further.
DR. AUSTIN UGANWA, SENIOR SPECIAL ASSISTANT TO IMO GOVERNMENT ON
DOCUMENTATION WROTE FROM OWERRI