Gov Ikpeazu
Abia state governor, Dr Okezie Ikpeazu on Tuesday 14th December, 2021 presented to the state house of assembly 2022 appropriation bill of 147 billion, 787 million, 781 thousand 300 naira for consideration.
The governor said the 2022 budget titled “Budget of economic recovery through industrialization and inclusive growth” Governor Ikpeazu said the theme is borne out of the state understanding that sustainable growth and development is hinged on industrialization. He added that the state chose the theme as the whole world battles to recover from the recession occasioned by the outbreak of the COVID-19 and the associated challenges that have plagued the global economic system over the last 2 years, Abia recognized an opportunity to take advantage of the industrial acumen of the average Abian, an opportunity to continue to drill a space to ingrain the Abia signature in the global value chain, through the unique products that are produced by the people.
According to him, the budget is made up of a recurrent expenditure of Sixty Six Billion, Eight Hundred and Thirty Million, One Hundred and Ninety Three Thousand, Two Hundred Naira Only, representing 45% of the budget.
Gov Ikpeazu added that the Capital Expenditure component is Eighty Billion, Nine Hundred and Fifty Seven Million, Five Hundred and Eighty Eight Thousand, One Hundred Naira Only, representing 55% of the total budget.
Ikpeazu disclosed that the budget is 10 percent high than 2021 budget.
He pointed out that managing the environment for sustainable development has also become a call that none can ignore.
2022 Forecast
Mr. Speaker, Hon. Members, It is important to note that 2022 is transition year. This means we would expect intensified political activities. This has implications for the economy and impact the fiscal outlook of the Government. This Administration intends to remain focused in delivering dividends of democracy to Abians. As such, it will approach the transition with caution to ensure that it does not derail the economic projections and plans of the Government.
Whether as fallout from COVID-19 or the outcome of other emerging macroeconomic dynamics, we have begun to see permanent changes to the way things are done everywhere. The intensity of engagement of technology is notches higher than it has ever been in history. In fact, observed changes in the knowledge economy are now so dominant and dynamic that they affect all spheres of economic and social life. It is imperative on the Government to lead the way for Abians to also adopt and adapt to these new ways. Not doing so will amount to social and economic peril.
In the same vein, managing the environment for sustainable development has also become a call that none can ignore. While the State Government joins the rest of the World to appreciate and work towards halting climate change and mitigating its effects, it has to proactively engage with relevant stakeholders in resolving the ever-present threat of erosion, waste disposal and other existential threats facing us.
Finally, we continue to appreciate the need to invest in our people through health, education and social protection. We appreciate that we have no greater asset than our people and we must cultivate, cherish, groom and protect them using every facility at our disposal. To their credit, Abians are innovative and extremely hardworking and only need complementation from Government to continue to remain competitive. We intend to also provide them with that edge they need to explore their potentials to the fullest. To that end, we appreciate the need for infrastructure – roads, electricity and water, among others. It is for this reason that this Government has not rested on its determination to ensure that the Independent Power Project in Aba comes on stream.
That is also the reason we have focused on revamping roads in the major cities of the State while working to link the different aspects of the rural areas with each other and with the cities.
We have continued to approach healthcare at the two ends of the most vulnerable – pregnant women and the elderly, giving these two unfettered access to free and responsive health services.
REVIEW OF THE 2021 BUDGET
The 2021 Budget was based on the following assumptions:
Oil price benchmark of 40 US Dollars per barrel of Condensates
Daily oil production estimate of 1.86 million barrels
Exchange rate of N379 per US Dollar; and
GDP growth projected at 3.0 percent and inflation closing at 11.95 percent
Based on the above, total projected Budget outlay for 2021 fiscal year was N131,815,753,720 (One Hundred and Thirty-One Billion, Eight Hundred and Fifteen Million, Seven Hundred and Fifty-Three Thousand, Seven Hundred and Twenty Naira) only.
As at September, 2021 the aggregate revenue inflow from both FAAC rand State Independent Revenue was N60,029,967,714 (Sixty Billion, Twenty-Nine Million, Nine Hundred and Sixty-Seven Thousand, Seven Hundred and Fourteen Naira only) representing only 46% of the total budget outlay. This shows dwindling financial fortune and accordingly impacts negatively on the Administration’s capacity to deliver on its mandates. However, with the resources available to the Government, we have continued to pursue specific agenda based on our assessment of the areas of greatest priorities to the people of Abia. These include:
Security of Life and Property – As noted earlier, the Government considers the sanctity of the lives and properties of Abians sacrosanct. Consequently, it takes security as its most fundamental responsibility and pursues it with every seriousness and resource.
Social Services – Very close to the security challenge is the need for provision of social services. The Government understands the utmost relevance of health, education, social amenities, safety nets and personnel motivation in the overall welfare equation of Nde Abia. Thus, it will continue to engage all energies and resources to implement programmes and projects that will enhance the welfare of the people as regards the provision of these social amenities. This is why it has continued to support the free lunch programme for primary schools. It is also the reason why the programme of upgrade of health facilities in the communities will continue,
Physical Infrastructure – The Administration, from the onset, have confronted physical infrastructure head on. In particular, we appreciate how important road infrastructure is to Abians, who are by nature very mobile and enterprising. Besides roads in Aba, Umuahia and Ohafia, our major cities, the Government is focused on connecting rural and feeder roads and linking them with urban markets to help in the production, evacuation and marketing of products with ease.
Ease of Doing Business – In appreciation of the need to maintain conducive environment for businesses in Abia, the Government has invested and will continue to invest in sustaining platforms for improving the business environment. The one-stop-shop for business registration, the SME support programme, the fast-track investment programme for trade and investment, and other economic development and empowerment projects in the State will continue to receive increased attention. Within this last quarter, the Government banned all engagement of consultants for revenue generation as part of its commitment to sanitize the environment and reduce burden on businesses.
SME Support and Development – We appreciate the critical place small and medium enterprises occupy in the Abia business environment. Consequently, the Government has been very dedicated in creating supporting facilities and environment to advance their prospects in the State. The Government established the Abia MSME Bank and recently commissioned the Enyimba Automated Shoe Company – ENASCO. The support programmes for the leather and garment industries continue to be upgraded and supported.
Support to the Agricultural Sector – Our farmers remain a sure source for food security in the state. For this reason, the Government has programmes of provision of land for cluster commercial farming. We also do our utmost to ensure availability of agro-inputs such as fertilizers and credit facilities to farmers at subsidized rate. The State is firmly committed to participating in the CBN Anchor Borrowers Programme as part of the agenda to help Abia farmers increase access to these advantages.
To deliver on these, we recognize the constraint the paucity of resources imposes on us. Consequently, we also see the need to improve on internally generated revenue, expand the revenue net and adopt new technologies and strategies to more efficiently generate and manage our resources.
The Government has already taken this as a challenge and has started working to marginally alter its approaches and restructure revenue institutions. It is our hope that the changes being made will yield greater dividends in no distant time.
BUDGET THEME & FISCAL TARGETS OF THE 2022 BUDGET
Mr Speaker and Honourable Members of the 7th Assembly, the Abia State 2022 Budget adopted the contents of the Abia State Agenda 2050 which is the long-term plan covering a period of 30 years.
The focus of the 2022-2024 Medium Term Expenditure Framework is “Economic Recovery through Industrialization and Inclusive Growth”. This theme is borne out of our understanding that sustainable growth and development is hinged on industrialization. As the whole world battles to recover from the recession occasioned by the outbreak of the COVID-19 and the associated challenges that have plagued the global economic system over the last 2 years, we recognize an opportunity to take advantage of the industrial acumen of the average Abian, an opportunity to continue to drill a space to ingrain the Abia signature in the global value chain, through the unique products that are produced by our people. We see an opportunity to pursue recovery by redirecting resources to improve on the production chain in the State and improve the overall quality of products coming from our people. It is an opportunity to displace established suppliers and producers with cost-effective, quality products from our people.
We appreciate the effects of the recession across all peoples of the world and equally on our people. We also recognize that we have to recover. And we intend to recover on a stronger footing, by supporting industrialization and inclusive growth. Diverse peoples will need diverse products as they begin to bounce back to economic normalcy; we intend to supply what they need in their bid to recover and thereby improve the economic stability of Abia businesses and people. As we engage opportunities to better the lot of the Abia business, they will create jobs for Nde Abia.
On its part, the Government will focus on safeguarding lives, jobs, businesses and encourage the rapid increase in number and performance of micro, small and medium enterprises and firms across all the nooks and crannies of the State. The focus will be to increase production in different sectors, safeguard the welfare of the populace and promote policies that support the creation of additional jobs.
Intended Measures
The following measures will be taken by the Government in the pursuit of its intentions under the 2022 fiscal year:
Sustain and improve on investment in education, healthcare and social welfare to ensure Abia residents are healthy, productive and competitive in line with the Sustainable Development Goals.
Foster the security of lives and property by targeting the roots of intolerance, communal violence, crime and other potential sources of insecurity.
Continue to promote good governance systems founded on competent and responsive public service with zero tolerance for corruption.
Rebuild, maintain, and expand infrastructure in water, electricity and road networks to accelerate economic growth and create jobs.
Promote agriculture and food security through greater access to inputs and access roads. Support emphasis on agriculture as a source of wealth creation and capital formation in its own right.
Continue to engage Ease of Doing Business platforms to support trade and investment, industry and SMEs, remove obstacles to investment and help the Abia business to find and exploit opportunities.
Ensure full operational activities at Enyimba Automated Shoe Factory Aba and other factories
Remodel key markets in Aba
2022 BUDGET FRAMEWORK
ABIA STATE BASIC 2022 MACROECONOMIC ASSUMPTION
Mr. Speaker, Honourable Members, the State adopted 2022-2024 Medium Term Expenditure Framework and Fiscal Strategy of the Federal Government which set the parameters for the 2022 budget as follows:
Benchmark oil price of $57
Daily Oil Production of 1.88
Exchange rate of N410.15 per US Dollar; and
GDP growth projected at 4.2 percent and inflation at 13%
The Total projected Budget outlay for 2022 fiscal year is N147,787,781,300 (One Hundred and Forty-Seven Billion, Seven Hundred and Eighty Seven Million, Seven Hundred and Eighty-One Thousand, Three Hundred Naira only, an increase of 10.81% from the 2021 Budget.
The Break Down is as follows:
The 2022 Budget outlay of N147,787,781,300 is made up of 45% as recurrent expenditures and 55% as capital expenditures.
1) Recurrent expenditure of N66,830,193,200 (Sixty Six, Billion, Eight Hundred and Thirty Million, One Hundred and Nine-Three Thousand, Two Hundred Naira) which is 45% of the total expenditure and 6.29 % increase from the 2021 Budget.
The recurrent expenditure is further broken down into:
Personnel Cost:- N31,479,160,500 (Thirty one Billion,
Four Hundred and Seventy Nine Million, One Hundred and Sixty Thousand, Five Hundred Naira)
Overhead Cost:- N17,700,456,400 (Seventeen Billion,
Seven Hundred Million, Four Hundred
and Fifty Six Thousand, Four Hundred
Naira)
Consolidated Revenue
Fund Charges:- N17,650,576,300 (Seventeen
Billion, Six Hundred and
Fifty Million, Five Hundred
and Seventy Thousand,
Three Hundred Naira.
2) Capital expenditure of N80,957,588,100 (Eighty Billion, Nine Hundred and Fifty-Seven Million, Five Hundred and Eighty-Eight Thousand, One Hundred Naira only) represents 55% of the total projected expenditure and 15% increase from the 2021 Budget. The sectoral allocation of the capital expenditure is as follows:
Administrative Sector- N11,696,303,300 (Eleven Billion, Six
Hundred and Ninety-Six Million, Three
Hundred and Three Thousand, Three Hundred Naira only)
Economic Sector: N52,155,504,200 (Fifty-Two Billion,
One Hundred and Fifty-Five Million,
Five Hundred and Four Thousand, Two Hundred Naira only)
Law & Justice Sector: N1,039,157,100 (One Billion, Thirty-
Nine Million, One Hundred and Fifty-Seven Thousand, One Hundred Naira Only)
Social Sector: N16,066,623,500 (Sixteen Billion,
Sixty-Six Million, Six Hundred and Twenty-Three Thousand, Five Hundred Naira Only)
CONCLUSION:
Mr. Speaker, Distinguished and Honourable members of the 7th State Assembly, let me use this opportunity to commend your firm commitment towards ensuring a very harmonious and productive relationship with the Executive. The challenges ahead in the coming year require that all of us must work together to deliver on our promises and commitments.
It is with great pleasure, therefore that I lay before the Distinguished members of the 7th Abia State House of Assembly the 2022 Budget proposals of the State Government, for your kind consideration and passage. I thank you and may God continue to bless Abia State.
Okezie Victor Ikpeazu, PhD, FNES
Governor, Abia State
December 14, 2021.
