BUDGET ADDRESS BY HIS EXCELLENCY, RT HON. (ELDER) SHERIFF F.O. OBOREVWORI, GOVERNOR OF DELTA STATE, ON WEDNESDAY, NOVEMBER 29, 2023.
It is my pleasure to present the Budget proposals for the 2024 fiscal year to this hallowed House. Today’s event brings back fond memories of when I presided over similar sessions as Speaker in this House for six remarkable years. Those were experiences I will forever cherish, and I thank God for the privilege of this opportunity to address this esteemed House as Governor.
- The 2024 Budget proposals, the first by this administration, is envisaged to give our people hope in a time of economic uncertainty, headlined by exchange rate volatility, persistent inflation, and higher interest rates.
- The proposals contain our roadmap for fiscal consolidation, and for charting a course for sustainable and inclusive economic growth guided by our strategic vision for development. That vision is encapsulated in our MORE agenda, which seeks to ADVANCE Delta State by bridging the infrastructure deficit, enhancing human capital development, and exploiting the opportunities for value-adding industries resident in our status as a coastal state.
- We are determined to keep Delta State ahead on all indices of social-economic development as reflected in our MORE agenda, which is undergirded by the core values of:
- Service and social responsibility;
- Transparency and accountability;
- Innovation and excellence;
- Freedom and opportunity; and
- Unity and respect.
Keeping Faith with the Electorate
- Though the Budget is essentially an estimate of projected expenditure, its presentation also provides a good opportunity for the government to present a report card of its performance. Hence, I crave your indulgence, Mr. Speaker, Honourable Members, to highlight some of our key achievements in five months.
- Recognizing the need to strengthen public service efficiency boost staff morale, and enhance productivity, I approved the payment of outstanding promotion arrears to twenty-three thousand, eight hundred and eighty-seven (23,887) workers in the state public service, totaling five billion, five hundred and twenty-two million, six hundred and thirty-seven thousand, eight hundred and forty-eight naira, and five kobo (N5, 522,637, 848.05). The payment commenced in August and will conclude by the end of this month.
- In the same vein, I approved the payment of N10,000.00 to each worker in the state public service for three months (August to October 2023.) to cushion the hardship our people are facing because of the removal of fuel subsidy and the attendant inflation. This bonus pay cost the state government one billion, five hundred and five million, eight hundred and eighty thousand naira (N1, 505,880,000.00) for fifty thousand one hundred and ninety-six workers (50,196).
- Still on staff welfare, it is my pleasure to inform you that the protracted issue of unpaid local government pensions is almost resolved. My administration helped to secure legislative approval for the local government councils to obtain a N40b bank loan to enable them liquidate their backlog of pension liabilities. The loan, which is guaranteed by the state government, is payable over a five-year period, and will be deducted from the accounts of the local government councils.
- I promised during the electioneering campaign to address staff shortages in our schools through continuous recruitment of teachers. In fulfilment of this promise, I gave approval for twenty-two local government councils to recruit 2,000 teaching and non-teaching staff to fill up existing vacancies.
Road and Physical Infrastructure
- Mr. Speaker, you will recall that I declared during my inauguration to restore the lost glory of Warri, the commercial capital of our state. In fulfillment of that promise, on Monday, November 27, 2023, I performed the groundbreaking ceremony for the commencement of the following flagship projects in the twin cities of Warri and Effurun.
– Study, Design and Construction of Road/Expansion of a Section of DSC/NPA Expressway from Effurun Roundabout to DSC Roundabout along Effurun/Patani (East West) Highway including the construction of a Cloverleaf Interchange of the Existing Effurun Flyover Bridge alongside two Pedestrian Bridges in Effurun, Uvwie Local Government Area of Delta State;
– Design and Construction of a Flyover Bridge from Enerhen Junction, Effurun, to Marine Gate Warri in Uvwie and Warri South Local Government Areas of Delta State;
– Design and Construction of a Flyover Bridge at DSC Roundabout, along the Effurun/Patani (East West) Highway; and
– Design and Construction of a Flyover Bridge at PTI Junction along the Effurun/Patani (East West) Highway.
- Worth approximately seventy-eight billion naira, these projects are being handled by construction giant, Julius Berger Plc, and has a completion period of 27 months. As I observed during the groundbreaking ceremony, “upon completion, these projects will not only change the face of Warri and environs, they will also ease the traffic congestion in the area and alleviate the hardship faced by commuters.
- “As is often the case with road constructions of this nature there will be direct employment opportunities for our people, especially engineers, artisans, and labourers. Food vendors and suppliers, transporters, quarry operators and so many others in the construction value chain also stand to benefit.”
- I am also pleased to report that we have completed some of the projects we inherited from the immediate past administration. At Dennis Osadebey University, Anwai, Asaba, we completed and commissioned the following:
– Administrative Building;
– 500-seater Auditorium;
– Two 250-seater Lecture Theatres;
– University Gate House;
– Access Road into the campus; and
– Faculty of Agriculture Complex
- We have also completed an ultra-modern Administrative Building, Vice Chancellors Lodge, and the Faculty of Engineering, all at Delta State University of Science and Technology, Ozoro. Also completed and commissioned by this administration is the Okpolo/Enhwe/Uwheru Road (Phase II) in Isoko South Local Government Area of Delta State.
- Meanwhile, we have awarded contracts for more road projects including the following;
– Construction of Nsukwa/Umute/Adonte Road (Phase I: Umute/Adonte) in Aniocha South LGA
– Rehabilitation of General Hospital Road with a Spur to Police Command Road from Warri/Sapele Road to Ajamimogha/Mabiaku Link Road, Warri in Warri South LGA
– Construction of Internal Roads and Drains in kurutie Town, Warri South-West LGA
– Rehabilitation of Esisi Road from Warri/Sapele Road to Estate Roundabout with a spur to Nana College Road to Link Ajamimogha Road, Warri, Warri South LGA
– Construction of Roads around Otovwodo Junction, Ughelli in Ughelli North LGA
– Construction of Okerenkoko Township Roads, (Phase V) in Warri South West Local Government Area
– Rehabilitation and Asphalt Overlay of Ohorhe/Adagbrasa-Ugolo-Okuodiete Road with a spur from Adagbrasa-Ugolo through Ughwagba Community to Okan Junction along Eku-Osubi-Effurun Road in Okpe LGA
– Reconstruction of Upper and Lower Erejuwa Road in Warri, Warri South LGA
- This administration will embark on the construction of more critical road infrastructure in the 2024 fiscal year because we are irrevocably committed to advancing urban-rural integration.
Getting Everybody on the same Page
- To promote better understanding of the MORE Agenda, the government, in collaboration with Sewa Assets Management, organized a week-long Executive Council Strategic Session and Retreat for Commissioners and Heads of Inter-Ministerial Agencies from November 13-18, this year. Through this retreat, the strategic imperatives of the MORE agenda have now been distilled into deliverables that can be measured, tracked, and reported.
- The highlight of the retreat was the signing of a Performance Bond by the Commissioners with the Governor. The essence of the Performance Bond is to ensure that the Commissioners stay focused on the deliverables that have been established, while aligning their programmes and activities with the policy directions of the MORE agenda.
The Philosophy and Thrust of 2024 Budget
- Mr. Speaker, we are living in tough times. In preparing this budget, we are mindful of the fact that inflation remains our primary economic challenge. And as we all know, inflation hurts everybody, but it hurts the poor and vulnerable the most. Inflation also exerts immense pressure on the budget, slows down economic growth, stifles investments, and encumbers access to financing.
- The current operating environment requires us to strike the right balance between maintaining a tight fiscal regime and helping our people to navigate this difficult period and lift as many as we can out of penury. Hence, this budget has been dubbed the Budget of Hope and Optimism. It is envisioned to put the economy on the path of sustainable growth, boost investments and productivity, enhance the ease of doing business, and provide ample opportunities for the average citizen to participate in the economy.
- Consequently, the proposed 2024 Budget has the following key objectives:
- Control the effects of inflation through fiscal discipline and judicious allocation of resources;
- Accelerate the development of infrastructure;
- Stimulate growth of the non-oil sector and make the economy more resistant to external shocks;
- Enhance the business competitiveness of the state by nurturing and promoting the growth of Micro, Small and Medium Enterprises;
- Create employment opportunities for our teeming youth population; and
- Raise the productivity of our land, labour, and capital.
- The 2024 Budget is anchored on the principle of open governance as its implementation strategy, which will promote transparency, accountability, and efficient – and effective – delivery of services to citizens. You would recall that Delta State in 2019 subscribed to the membership of Open Government Partnership (OGP). The Partnership is a multilateral initiative that aims at obtaining concrete commitments from national and sub-national governments to promote open government, empower citizens, fight corruption, and harness new technologies to strengthen governance. Delta is a member and we are going to deeply entrench these principles in the implementation of the 2024 Budget.
- Mr. Speaker, we will also be prioritising budget monitoring and evaluation to ensure the citizens get value for every money spent by government. This will entail monitoring almost every single project and programme in the budget. This is to ensure they are implemented as planned and completed within the specified time frame.
- To achieve this, we will strengthen the capacity of our budget monitoring and evaluation units and ensure they are equipped to carry out their mandates effectively. We will also work closely with other stakeholders, including the House of Assembly, to ensure that all budgetary processes are transparent and accountable. Together we can lay stronger foundations for a better future.
REVIEW OF THE PREFORMANCE OF 2023 BUDGET (January – September)
- Mr. Speaker, you will recall that the fiscal year was opened with an approved budget of 571.6 billion naira. This initial budget was revised twice following improvement in revenue available to the State and the overarching need to do more for the citizenry. We had a revised budget of 642.8 billion naira in the month of May, 2023 and a final budget of 809.4 billion naira. The profile of the 2023 budget is as follows:
|Approved 2023 budget
|% of total budget
REVENUE BUDGET PERFORMANCE
- The sources of revenue for funding the 2023 Budget are as shown below:
EXPENDITURE (Recurrent Budget)
- The total recurrent budget for the year 2023 is 287.6 billion naira. The breakdown is as shown below:
EXPENDITURE (Capital Budget)
- The total capital budget approved for 2023 fiscal year is 521.8 billion naira. The breakdown is as follows:
- Permit me to proceed and show you how we have performed in the year.
BUDGET PERFORMANCE (JANUARY TO SEPTEMBER, 2023): REVENUES
- The State Government, during the period under review generated 608.5 billion naira representing a performance of 75%over the the total budget of 809.8 billion naira and about 100% performance of the proportionate budget of 607 billion in the nine months of the year. Out of this amount, the sum of 417.3 billion naira was received as Statutory Allocation from the Federation Account. The amount represents about 110% performance of the total budget over the proportionate budget of 379.1 billion naira for statutory allocation.
- On the other hand, the sum of 29.8 billion naira was recorded as receipts from Value Added Tax (VAT) out of the proportionate projected estimates of 30.8 billion in nine months representing a budget performance of 97% for the period under review.
- The sum of 87.6 billion naira was received as Internally Generated Revenue (IGR) in the first nine months of the year against a proportionate projected revenue of 78.8 billion naira, representing a budget performance of 111.18%. The total budget for IGR in 2023 is projected at 105.1 billion naira. This impressive performance is attributable to the revenue collection reforms embarked upon by the State Internal Revenue Service.
BUDGET PERFORMANCE (JANUARY TO SEPTEMBER, 2023): EXPENDITURES.
- The total recurrent budget for 2023 is 287.5 billion naira. Our total expenditure profile for January to September, 2023 shows that the total sum of 535.8 billion naira for Recurrent and Capital. Out of this amount, the sum of 261.3 billion naira was incurred on recurrent items, as against a proportionate approved recurrent budget of 215.7 billion naira, representing a negative budget expenditure performance of 121% over and above the budget.
- The sum of 521.8 billion naira was budgeted for Capital Expenditure. During the period under review (January – September, 2023), the sum of 274.4 billion naira was spent against the proportionate budget figure of 391.4 billion naira,which represents a performance of 70.1%.
2024 BUDGET ESTIMATES
- Mr. Speaker, distinguished Members of this hallowed House, I now present to you the Budget Estimates for the 2024 fiscal year.
- I wish to announce a budget proposal of 714.4 billion naira for the services of Delta State Government in 2024. This amount comprises the sum of 316.6 billion naira or 44% of total budget for recurrent expenditure, and 397.9 billion naira or 56% of total budget for capital expenditure. The summary is as follows:
- The 2024 budget proposal shows a decrease of 94.9 billion or 12%, compared to the 2023 approved budget of 809.4 billion naira. The slight decrease is due to the fact we have planned the 2024 budget around fiscal discipline, which means that the budget will be funded largely from within and the State would spend only what it can earn within the period.
SOURCES OF FUND
- The main sources of funds for the 2024 budget as proposed will be mainly from the following sources:
- Internally Generated Revenue
- Statutory Allocation
- Mineral Derivation
- Value Added Tax
- Other Capital Receipts
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 110.3 billion naira in internally generated revenue in 2024, representing 15%of the total projected revenues. The IGR estimates for 2024 is higher than the 2023 approved estimates by 5.3 billion naira or 5% increase. The increase anticipated in IGR returns will come from the reforms being put in place, which includes the professionalization of revenue collection process.
STATUTORY ALLOCATION (INCLUDING MINERAL DERIVATION)
- Following the savings from the removal of oil subsidy, the fund available for states to share from FAAC will improve in the coming year. Using the forecast from receipts in the past few months, as a guide, the sum of 507.9 billion naira or 71% of projected total revenue for the 2024 fiscal year is expected to come from Statutory Allocation. This amount is more than the sum of 505.4 billion naira, projected for the 2023 fiscal year by 2.5 billion naira or less than 1%. 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.
VALUE ADDED TAX (VAT)
- It is estimated that the sum of 45.8 billion naira will be received as VAT remittance in 2024. This is 4.8 billion naira or 11.56 % increase over the 2023 figure of 41.0 billion naira. There is noticeable improvement in VAT administration at the federal level, which in turn has improved the state share of the VAT revenue. This can be seen from the over 96% performance of the 2023 budget for this revenue line between January and September where the sum of 29.8 billion naira was received against the 30.8 billion naira proportionate budget for the period.
OTHER CAPITAL RECEIPTS
- The proposal for Capital Receipts for the 2024 budget has been scaled down from the sum of 157.9 billion naira in the 2023 budget to 50.4 billion nairaor 68% decrease in 2024. The reduction is hinged on the overriding objective to cut down borrowing and reduce the loan burden on the State.
- The proposed recurrent expenditure estimates for 2024 of 316. 6 billion naira is made up of personnel costs of 150 billion naira which is 21% of the proposed Recurrent Budget. Also, 39% of the total proposed 2024 budgetand overhead costs of 106.6 billion naira is 15% of the Recurrent Budget estimates or 35% of the aggregate budget proposal for 2024.The personnel cost of 150 billion naira anticipates the domestication of a likely salary increase by the Federal Government sometime in 2024 while the overhead cost mirrors the inflationary trend in the country.
- The recurrent expenditure estimates are summarized below:
CAPITAL EXPENDITURE ESTIMATES
- The proposed capital expenditure estimate is397.9 billion naira or 56% of the total budget. This estimate proposal is 123.9 billion naira or 24% lower than the 2023 capital budget of 521,8billion naira. This is largely accounted for by smaller budget size of 714. 4 billion naira as against the 809 billion naira of 2023.
- The sectoral breakdown of the capital expenditure estimates is as stated hereunder:
- Mr. Speaker, Honourable Members, I will now briefly touch on some sectoral highlights of the proposals for capital projects as contained in the 2024 Budget estimates.
- I celebrate the remarkable achievements of my predecessor who made tremendous strides in infrastructural development across our State. The impact of these investments is visible in the improved quality of life for our citizens, increased economic activities, and enhanced connectivity of our communities.
- However, there is still much to be done, and my administration is committed to building on the successes of the past and taking our State to new heights. To this end, we will prioritize infrastructure development as a key driver of economic growth and social development. We will invest in critical sectors such as transportation, energy, water, and telecommunications, with a focus on expanding access to underserved areas and improving the resilience and sustainability of our infrastructure.
- The sum of 150 billion naira has been earmarked for Ministry of Works to execute capital projects in the forthcoming fiscal year.
- Education is a critical component of our state’s development, and this administration is committed to ensuring that every citizen has access to quality and affordable education. We recognize that education is not only a means to personal development but also a key driver of economic growth, social mobility, and national competitiveness. We will prioritize investments in technical education and vocational training. We believe that these sectors have the potential to transform our economy by creating a skilled workforce that is equipped to meet the demands of modern industries and entrepreneurship.
- We will work closely with our educational institutions, industry leaders, and other stakeholders to develop programmes that are tailored to the needs of our people and equip our students with the skills-set they need to succeed in the 21st century.
- In addition, we will also prioritize investments in teacher training and professional development. We recognize that our teachers are the backbone of our educational system, and we are committed to providing them with the support and resources they need to deliver high-quality instruction. We will work with our educational institutions to provide training and development opportunities for our teachers, with a focus on improving their pedagogical skills, subject matter expertise, and use of technology in the classroom.
- We also recognize the importance of entrepreneurship in driving economic growth and creating job opportunities. We will, therefore, support the development of incubators and accelerators that provide support and resources to aspiring entrepreneurs. We will work with industry leaders to identify emerging sectors and provide training and mentorship to entrepreneurs in these areas.
- The sum of 46.55b billion naira has been earmarked for the education sector in 2024 budget.
- I want to reaffirm my administration’s commitment to ensuring that every citizen has access to quality healthcare. We will prioritize investments in healthcare infrastructure, medical equipment, and personnel. We recognize that our healthcare system is only as good as the people who work in it. Hence, we are committed to attracting and retaining the best healthcare professionals in our hospitals.
- We will work with our healthcare professionals, community leaders, and other stakeholders to develop programmess that provide comprehensive, integrated, and culturally sensitive health care services to our citizens.
- The health sector will work with the sum of N18.65 billion in the 2024 fiscal year.
- Agriculture has always been the backbone of our economy, providing food, jobs, and income for our people. As we move forward, it is imperative that we prioritize the growth and development of this sector. We must invest in modern farming techniques, provide farmers with access to credit, and support research and development in agriculture.
- Our state has enormous potential to become a leading agricultural hub. We have fertile land, abundant water resources, and a favourable climate for farming. But we must seize this opportunity and invest in our agriculture sector.
- In this year’s budget, we have allocated a significant portion of our resources to agriculture. This investment will go towards the construction of modern irrigation systems, the provision of seedlings and fertilizers to farmers, and the establishment of agricultural processing plants to add value to our produce. We will also prioritize the training of our farmers in modern farming techniques and best practices especially in the production of food crops like rice, cassava, yam, maize, vegetables, and greenhouse facilities.
- The sum of N7.0 billion has been earmarked for the Ministry of Agriculture.
ENVIRONMENT AND URBAN RENEWAL
- Three major factors have impacted heavily on our environment. The first is our fast-growing population, the second is our status as an oil producer, and the third is our peculiar location as a coastal State.
- Consequently, we are confronted with environmental hazards associated with oil and gas exploration, solid waste disposal/management, erosion and flood control, land degradation, deforestation, and the increasing risks from climate change.
- We are committed to a comprehensive urban renewal program that will address these issues head-on. We will invest in rebuilding our roads and bridges, upgrading our public facilities, and revitalizing our urban centres. We will also prioritize the provision of affordable housing for our people.
- The sums of 7.5 billion naira and 2.1 billion naira have been earmarked for the Ministry of Urban Renewal and Ministry of Environment respectively in the 2024 Budget proposals.
- Our commitment to youths runs deep. As captured in our MORE agenda policy document, government will focus on achieving tremendous and suitable youth-focused investments for employment and wealth creation in the economy, including ICT, creative industry and innovative crafts and sports.
- The Ministry of Youth Development has a proposed budget of N1.7 billion in the 2024 budget.
- Mr. Speaker, Sir, I have set forth a framework of action-plans with a view to ADVANCING Delta State through massive infrastructural renewal, human capital development, and appropriate social investment programmes. This budget is emphatic on keeping our expenditure within revenue limits, reducing our debt profile, and ensuring that we do not build new inflationary pressures through extra budgetary funding. This presents a challenge to Ministries, Departments, and Agencies of government to embrace the timeless principles of strategic planning, fiscal discipline, excellent service delivery, and the judicious allocation of resources to projects and programmes based on their socio-economic value.
- Earlier in this speech, I highlighted some notable achievements of this administration. That we were able to do so much within such a short time reflects our commitment to these enduring values. This administration is focused, process driven, and result-oriented in its governance style. The progress that we have made in the last five months should give hope to our people that the goals we have set in this budget will be pursued with similar zeal and dedication. Rest assured, this administration is determined to see our people through the hard times, doing all that we can to assist the poor and vulnerable.
- Mr. Speaker, I note with gratitude that we could not have made much progress without the cooperation and support of this Honourable House. I thank your esteemed self and the Honourable Members for their understanding and the synergy that exists between the legislature and the executive arms of government. This sense of mission and unity of purpose are crucial for us to actualize not only the promises of this Budget but also the mission of our MORE agenda. There should be no room for division and/or complacency.
- My appreciation also goes to the political class, the Civil Service Establishment, the Nigerian Labour Congress, Trade Union Congress, all others workers’ unions and associations, and the good people of Delta State for their cooperation and support.
- Mr. Speaker, it is now my pleasure to lay the 2024 Budget proposals as read before this Honourable House for consideration, debate, and approval.
- Thank you for your time and attention.
- God bless Delta State
- God bless us all.
Office of the Governor