Inside Makinde’s N208bn budget estimates for Oyo people

AS it is customary for the head of the executive arm of government, Oyo State governor, Seyi Makinde, on  ednesday, laid before the state lawmakers the state’s 2020 budget estimates. To show the serious attached to the provision of good governance expected of him from the people of the state, the governor did not wait till the last month of the outgoing year to present the budget, as had been the practice eight years before his administration.

Governor Makinde has been running the state since his assumption of office with the 2019 budget inherited from his predecessor. He has had to review the inherited budget downwards to make it in tune with the extant economic realities of the state. Thus, the 2019 budget was cut down from N285.2 billion to N182 billion.

In his first budget, the governor proposed N208.8 billion as what is to be spent in 2020 to bolster the state’s economy, a projection he said was realistic, having taken into account estimated takings of the state from the Federation Account, internally generated revenue and accruals from other sources of revenue.

Infrastructure/work and the education sectors took the largest share of the budget, recording 23.9 and 22.3 per cent respectively. While 5.1 per cent will go to the health sector, 4.4 per cent is allocated to the agriculture sector.

Allocations to the various sectors of the economy in the proposal reflect the Makinde administration’s cardinal focus on security, education, health and expansion of the state economy.

Economic experts have always advocated increased capital expenditure in budget preparation. But despite this advocacy, a common denominator in most state and federal budgets is that recurrent and overhead costs usually outweigh the capital costs, leaving tales of infrastructural deficits on many occasions.

Determined to break away from the past therefore, Governor Makinde jacked up capital expenditure by 20 per cent, compared to what obtained in the 2019 budget. Spending on long term assets for the state in the New Year thus constitutes 47 per cent of the budget, to gulp N100 billion out of the N208.8 billion estimated.

According to the governor, the administration targets a minimum of 70 per cent budget implementation, a big leap from the 2019 budget which recorded below 40 per cent performance.

Addressing the House of Assembly during the presentation, the governor said: “It is our plan to be bullish with infrastructural development, especially road construction. Recently, we awarded the contract for the Moniya-Ijaiye-Iseyin road with a completion agreement of 12 months. The contractor has since moved to the site and commenced work.

“With properly constructed and repaired roads, our farmers and others engaged in business in rural areas can move themselves and their produce to markets where they can get better prices. Therefore, the completion of these roads is a priority. To this end, the sum of N35.4 billion has been provided in the 2020 budget for ongoing and proposed roads projects in all the senatorial zones.

If there is any sector the governor has received arguably the loudest praise, it is in the area of his policies on education. Payment of fees has been abolished, just as textbook and exercise books, including past questions of public examinations, have been distributed to pupils in the state free of charge. In addition, schools have begun to enjoy running grants which disappeared from the school system prior to the coming to Makinde.

The governor, despite his efforts in this social sector, knows where the shoe still pinches. He consequently used the occasion on the budget presentation to voice his determination to address the grey areas. “We are having challenges with teacher recruitment, training, and workforce development. We also need to construct and renovate more classrooms in schools across Oyo State and provide them with needed security.

“In addition, we need increased funding for our state-owned higher institutions to better position themselves for human capital development. In the 2020 budget, we have provided for capital projects in this sector along with regular payment of subvention. For these reasons, education comes a close second to works with a total allocation of 22.37 per cent of the budget,” he said.

Health and agriculture also received priority in the budget as the sectors got 5.18and 4.43 per cent respectively. Earlier in the outgoing year, Governor Makinde had said he would channel the N7.6 billion CBN loan accessed by the immediate past administration for the procurement of agriculture implements into the revamping of two of the nine farm settlements in the state. He said turning the farm settlements into farm estates with crop processing facilities would help boost food sufficiency and increase IGR for the state.

“On assumption of office, we discovered that our hospitals were mere consulting clinics due to lack of basic functional medical equipment.

In September, we installed and inaugurated the Radio-diagnostic Unit, a surgical operation theatre and an automated medical laboratory at the Adeoyo State Hospital, Ring Road. This ensures quality healthcare delivery to the people of Oyo State.

“In the next fiscal year, similar facilities will be rebuilt or renovated in other State Hospitals. Similarly, the General Hospitals in Eruwa, Tede and Iseyin will be renovated in the 2020 fiscal year.

“With this development, there is greater pressure on health facilities and thus a need for more personnel. I have, therefore, given approval for the recruitment of 500 Medical and Health Workers in our hospitals, at the state College of Nursing and Midwifery as well as the College of Health Science and Technology,” he said.

The governor did not leave the lawmakers and other stakeholders in doubt as to where the money to fund the projects envisaged in the budget would come from. “ In 2019 for instance, the last administration projected N25.55 billion as revenue from MDAs and N91.59 billion from statutory allocations. These projections were higher than what could be achieved. We have had to mark these down by 4.79 per cent for MDAs and 6.08 per cent from statutory allocations.

“However, we have reviewed Internal Generated Revenue (IGR) upwards based on various strategies we have put in place. We are expecting monthly revenue of at least N3 billion starting from January 2020. You will be happy to hear that in the month of October, we were able to increase the state IGR by N400 million, such that we had an IGR of N2.7 billion recorded for that month.

“The last two sources of revenue are capital receipts which are down by about 10 per cent to N33.50billion compared to the 2019 budget, and loans for capital projects at N28.99 billion,” he said.

It is the consensus among observers and experts that the 2020 fiscal aspiration of the Makinde administration stands out in a number of ways. One, since the return of civil rule in 1999, it is perhaps the first budget that can be said to be largely owned by the people.

Before its preparation, the state government organised a series of town hall meetings across the zones in the state. The people of each zone voiced the projects they would want the government to capture in the budget.

Majority of the views expressed by stakeholders and the projects listed by them and documented by government were said to have factored in, in the preparation of the 2020 budget.

The governor appears determined to return governance to the days of yore when projects were based on people’s needs, rather than the government imposing any projects on the people. For adopting this model of development, a bottom-up approach to governance, Makinde has received encomiums from the people of the state.

The United Nations Education, Scientific and Cultural Organisation (UNESCO) stipulates that the international benchmark for education budget should be between 15 and 20 per cent of the total budget.

Governor Makinde, in his first budget, not only gave the sector the second highest votes, he has also surpassed the benchmark set by UNESCO. Viewed against the backdrop that the World Bank and the IMF have been crusading huge investment in human capital development, Oyo’s 2020 shows Makinde’s commitment to improving the education sector and restoring the state to its pacesetting glory.

The amount of money to be spent on capital projects across the three senatorial districts in the state went up in 2020 budget by about 20 per cent, compared to what was in the 2019 budget of his predecessor.

The governor gave the reason thus: “The importance of this increase should not be lost on us. Increased allocation to capital projects directly contributes to a more buoyant economy and sustainable development. As stated earlier, we will not only be starting new projects but also completing all ongoing projects from the previous administration.”

To give a fillip to his commitment to agric development and in recognition of Oke-Ogun axis as the food basket of the state,  Makinde directed the relocation of the headquarters of a rural-based agricultural development outfit, Oyo State Agricultural Development Programme (OYSADEP), from Ibadan back to Saki, where the immediate past administration moved it to Ibadan. The governor also promised to restructure and strengthen the agency to help it achieve the objectives for which it was founded.

For OYSADEP, the governor should also see to it that the Ministry of Agriculture is empowered to address some of the challenges facing OYSADEP, namely lack of funding for most of its extension activities, shortage of extension service staff, provision of vehicles for proper supervision, among others.

Unlike the previous budgets of the state and the fashion of titling budget to tickle fancies and play on semantics, the Makinde budget, though not specifically christened, comes across as a budget of reality and not one prepared to keep up with the Jones. It is a budget prepared in accordance with the available material and not in deference to the size of the state as the most populated in southern Nigeria.

“When we set out to prepare the budget, our aim was to keep the budget realistic. To prepare the budget where the projected revenue matches projected costs, unlike what has been the practice in the past.

“With the total budget of N285.2 billion and pro rata revenue estimates of N71 billion in first quarter of 2019, only the sum of N28 billion representing 10.01 per cent of total budget and 38.68 per cent of the pro rata estimate was achieved. Similarly, the expenditure performance at the end of first quarter of 2019 was N27 billion compared to the prorated sum of N71 billion. This presented a budget performance of 38 per cent.

“Hence, our administration reduced the total budget size from N285.15 billion to N182.39 billion to make it more in tune with present income and expenditure, representing a reduction of 36 per cent on the average. In specific terms, the budgetary provisions for the office of the governor and the state House of Assembly were reduced by 40 per cent,” he said.

Another highpoint in the budget is the plan by government to promote 10, 000 civil and public servants as well as fast-track the conversion and transfer of about 400 workers. Also personnel cost is reduced by 10 per cent from the figure recorded in the 2019 budget.

The vote for the office of the governor by the immediate past government was more than what was allocated to about four ministries.

But Governor Makinde has demonstrated to break away from such past. In the inherited 2019 budget which he pruned down, what the office of the governor and the state lawmakers were allotted was reduced by about 40 per cent.

The governor also emphasised that his administration would work towards ensuring that 70 per cent of the budget is implemented. “We believe we can even exceed this because we are not building castles in the air. Our proposed budget income matches our proposed expenditure,” he said.

Commitment also came from the governor on fiscal discipline and transparency which are the hallmarks of budget designed to make impact on the lives of the people. He promised to see to the judicious use of every kobo appropriated by the lawmakers, while asking for timely passage of the budget to quicken the development of the state and the actualisation of his agenda.