Tuesday, 6 December 2016

Obiano Tables N115.5bn Budget of Economic Recovery and Inclusive Growth before Anambra Assembly.


Your Excellency, the Deputy Governor,
The Right Honourable Speaker, Honourable Deputy Speaker,
Principal Officers of the House and other Honourable
Members of the Anambra State House of Assembly,
The Chief Judge of Anambra State,
The Secretary to the State Government,
The Chief of Staff,
The Head of Service,
Honourable Commissioners,
Special Advisers to the Governor,
The Clerk of the House,
Permanent Secretaries,
Traditional Rulers,
Members of the Press,
Distinguished Ladies and Gentlemen,

Good morning.

It is an honour to stand before this dignified Assembly today, to present to you my administration’s Draft Estimate and Roadmap for the 2017 Fiscal Year. However, before I proceed with the business of the day, I must not fail to express the profound gratitude of the Executive Arm of Government for your commendable partnership with us in the outgoing fiscal year. Madam Speaker and Honourable Lawmakers, permit me to observe that the great cooperation we have enjoyed together has been in the best interest of Anambra State and as we prepare to enter the next fiscal year, I hope that we shall all work hard enough to sustain it. Dalunu!

Madam Speaker and Honourable Lawmakers, the outgoing year 2016 may well be Nigeria’s worst nightmare in recent memory. There were challenges from all fronts. But to the Glory of Almighty God, Anambra State stood tall through it all. We have continued to honour our financial obligations and to keep our electoral promises to Ndi Anambra.

Madam Speaker and Honourable Lawmakers, the 2016 Budget presented a great opportunity to my administration to extract the inherent values and benefits of my Economic Blueprint in fulfilment of my promise to Ndi Anambra.

Indeed, I am truly delighted to report that even in the face of adversity, we remained firmly focused on the foundational philosophies of my administration. We stayed true to our Vision of making Anambra State the First Choice Investment Destination and a hub for industrialization and commercial activities. We also kept to our Mission of making Anambra State a socially stable, business-friendly environment that would attract both indigenes and foreigners to seek wealth-creating opportunities. Indeed, despite the severe economic environment of the outgoing year, we made a great deal of progress in reinventing Anambra State and opening her up to the world.


Madam Speaker, Honourable Lawmakers, for most Nigerians, only one word defines the outgoing fiscal year. That word is RECESSION! This is the economic reality that emerges when a country records two consecutive quarters of negative growth in her GDP in a given fiscal year. Indeed, fellow compatriots, this economic tragedy occurred during the first three quarters of the current year, hence, plunging our nation into its most difficult year in recent times. A Recession typically limits the ability of governments and private sector to realise set out objectives. To that extent, the contraction of the nation’s economy affected some of Nigeria’s best laid out plans. It also impacted our plans for Anambra State.

Indeed, the outgoing year is a year in which the worst fears of the nation manifested. The macro-economic environment that had looked bleak all along finally came off the hinges. The continuous assaults on oil installations in the Niger Delta eventually impacted negatively on our nation’s daily oil production combined with a southward slide in oil prices, thereby reducing revenues accruing to all tiers of government by over 60%!

The decrease in revenue brought about an acute shortage of dollars which greatly impacted the productive sector of our economy. The scarcity of foreign exchange combined with other negative indices in the economy forced many manufacturers, importers and other service providers out of business and led to a mass shutdown of factories and increased unemployment across the country.

Madam Speaker, Honourable Lawmakers, for the first time in living memory, Nigeria found herself in an extremely difficult situation as the Nigerian Army went to war on two fronts within Nigerian territory. The war with the terrorist group, Boko Haram and the war against militancy in the Niger Delta. These issues further exacerbated the economic challenges faced by Nigerians across the country. 


The Anambra Response

Madam Speaker and Honourable Lawmakers, it is heart-warming to note that the economic and social whirlwind that swept through the country for the better part of this year did not affect the basic foundations of peace, security and even comfort that we have enjoyed in Anambra State in the past two and a half years. Nor did it derail our steady march to a prosperous and more forward looking Anambra State. What it did however is that it forced us to look inwards more often for solutions to our problems. It also forced us to re-evaluate our priorities and align government spending to projects that offer us maximum values with minimum investment; projects with a high socio-economic impact and projects that will secure the future of Anambra State. The bleak operating environment also made us hold on very tightly to our administrative maxim – “doing more with less” and ensure that whatever we do is a reflection of this philosophy.

Fellow compatriots, what stands out as our most proactive response to the Recession was the announcement of my Economic Stimulus Package in September earlier this year. Its sole objective was to cushion the impact of the economic meltdown and help our local economy weather the storm and regain its path to recovery.

My brothers and sisters, my administration is genuinely concerned about the plight of Ndi Anambra. We are worried about our hardworking industrialists who have thousands of our people working in their factories in Onitsha, Nnewi and other parts of the State. We are worried about the owners of small businesses and start-ups for whom this Recession has been the ultimate dream killer. We are worried about the low income earners – the wheelbarrow pushers, the cleaners in various offices and the petty traders selling bananas at Oye-Agu Market in Ifitedunu. Madam Speaker, we are worried about my good people of Anambra State.

In response to their plight we came up with an Economic Stimulus Package that seeks to make critical interventions in four broad areas, namely – the Tax Relief Programme, the Special Intervention Programme for Small and Medium Enterprises, the Social Intervention Programme for Low Income Households and finally the Intervention in Infrastructure-for-Jobs.

Madam Speaker and Honourable Lawmakers, in pursuit of this, we effected the following:
We suspended collections of wheelbarrow and hawkers taxes across all markets in the State.
We suspended the sale of consolidated emblems across the State.
We reduced taxes for Okada and Keke riders to N50 and N200, respectively.
We banned all illegal levies across all Government owned primary and secondary schools in the State.
We offered employment to over 250 physically challenged graduates into the State Civil Service.
Through our Partnership with United Nations Development Program, we trained and empowered 200 persons living with disabilities.
We provided low interest facilities totalling N1.5bn through Anambra State Small Business Agency to support Small-Medium Enterprises and Micro enterprises. We have also reached advanced stages in our quest for additional funding to scale up our efforts in this regard.
We catalysed domestic productivity and are creating jobs and stimulating our local economy across 181 communities in the State through our highly applauded N3.6bn Community-Choose-a-Project Programme.

In much the same way, Madam Speaker, we have also succeeded in drawing the attention of the Federal Government to the manufacturing sector in Anambra State. The recent visit by the Vice President of the Federal Republic of Nigeria, Prof. Yemi Osinbajo is a significant step in the right direction. Fellow citizens, the Vice President’s visit was a response to a formal request that I made to the Presidency after holding fact-finding deliberations with the leaders of the Manufacturers Association of Nigeria (MAN), the Nigerian Association of Chambers of Commerce, Industries, Mines and Agriculture (NACCIMA) in Anambra State. We continue to pursue the assurances given to us by the Vice President during his visit to ensure that our entrepreneurs have significant support from the Federal Government to engineer a realistic comeback for their businesses.

Madam Speaker, it is indeed, a thing of joy to me that despite the parlous state of the economy and the challenges caused by the current Recession, Anambra State has continued to honour all her financial obligations and pay salaries and pensions as and when due. I must confess that while this has not been an easy feat to achieve in a country where only 4 out of 36 states are able to cover their recurrent expenditure, my Team and I are determined to sustain this tradition against all odds. This feat has been achieved through prudent management of resources, pruning down our recurrent expenditure and increasing internally generated revenues, which have averaged at approximately 1.2bn monthly.

Fellow citizens, we maintained a firm handle on Security and Safety in Anambra State in the outgoing year. Indeed, there was no let up as a few attempts to breach our iron tight security failed woefully. A good case in point was the kidnap of a transporter in Onitsha which our men swiftly tracked to a hideout in Oji River, Enugu State and rescued the victim from the kidnappers den without firing a single gunshot. To the Glory of God, we have enjoyed a long, unbroken period of peace and tranquillity in this great state that has firmly positioned Anambra as the safest state in Nigeria today.

In spite of the current economic challenges, Anambra continues to retain its position as one of Nigeria’s most investment friendly state evidenced by over 29 companies and $4.5bn attracted since the onset of my administration. However, during the 2016 fiscal year, Anambra State Investment Promotion & Protection Agency (ANSIPPA) attracted over $494m across numerous sectors, such as Real Estate, Entertainment, Transportation, Agriculture and Power. About 10 companies have commenced operational activities in the State. Investors such as Coscharis Farms in Anaku, Joseph Agro Farms in Ufuma, Lynden Poultry Farms in Igbariam, Global Gaming Company in Awka, etc are at various stages of their business cycle in Anambra.

Madam Speaker and Honourable Members, the outgoing year will also go down in history as the year that Anambra made headlines as a leader in Agricultural production in Nigeria. It is the year when our vegetable produce was granted entry into the UK and the same year that Anambra Rice became one of Nigeria’s most sought after brands of rice. It is the same year that the Federal Government turned its full attention to Anambra State with the visit of a delegation comprising of the Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, the Minister of Agriculture, Chief Audu Ogbe and the Chairman of the Special Committee on Agriculture, Governor Atiku Abubakar Bagudu. The visit of the delegation marked Anambra’s full recognition as a force to reckon with in Agriculture in Nigeria.

Some key interventions/achievements during the year in the Agriculture sector are:
We distributed 250 tonnes of certified rice seedlings, 300 tonnes of Maize and 30,000 bundles of termite-resistant cassava stems to Farmers at the onset of the planting season.

We plugged into E-Agriculture which we refer to as the “Anambra State Agriculture Control and Monitoring Centre”. This technology enables us monitor and evaluate the activities of over 97,487 farmers comprising of 55,434 women, 38,221 men and 24,761 youths.

In rice specifically, for the 2016 farming season, our records indicate that our rice production is estimated at 230,000 metric tonnes which beat our 2016 target of 210,000 metric tonnes. While our yield has improved from 3.3 tonnes/hectare to 5.5 tonnes/hectare on average.

Our Anambra rice brand continues to soar, as the likes of Coscharis Farms, Novtec Farms and Joseph Agro Farms are currently milling rice paddies with a view to launch their brands in Anambra before the end of the year.

With the support of FADAMA and IFAD, we launched our Community Development Program to support the rice value chain this year. This project employs 120 youth in Anambra South Senatorial zone. We plan to replicate this program across all major agro corridors in the state.

Similarly, we have continued with our programme of providing quality public infrastructure across the state. Some notable interventions in the current year are:

We completed the three imposing Flyover Bridges in Awka at Aroma, Akwata and Amawbia each with state-of-the-art street lights, suspension lighting system and surrounding slip roads. These three bridges have greatly transformed the skyline of our capital city, Awka. We also completed the Anambra River Bridge in Aguleri measuring 280 meter making it the longest bridge in Anambra today and in the South East.

Extensive work is ongoing on over 300 km of roads projects across the state. With the onset of the dry weather, we have mobilized all our road contractors back to work across all senatorial zones in the State.

We have accelerated the reconstruction of inner city roads and patching of pot holes on our roads. This was possible through the repositioning and restructuring of Anambra Road Maintenance Agency (ARMA). We have employed 150 youths and distributed them across our 3 senatorial zones for proper engagement of the Zero pothole initiative.

We have currently finalized plans to procure a new asphalt plant as this will provide us with a more cost effective approach for road construction and maintenance, especially in the rural areas and on low density roads.

We embarked on an aggressive street lighting program across the State. The aim is to significantly reduce security challenges and beautify our major cities. We have completed and commissioned street light installations on the following streets:
Amansea to Oyeagu junction, Abagana through Old road
Governor's Lodge Amawbia to Nibo.
Arthur Eze Avenue to Eke Awka Market.
Orizu Road, Nnewi.
The three newly constructed flyovers at Aroma, Akwata and Amawbia junction by Enugu-Onitsha expressway.
Amawbia roundabout to Agulu by Agulu Lake

While street light installations at these locations are at advanced stage of completion;
Oyeagu junction, Abagana to Nkpor by Old Road.
Ngozika Estate, Awka.

Madam Speaker and Honourable members, our hold on Education did not slack in the outgoing year. As you are aware, my administration has a three pronged approach to guide our interventions in this sector, namely 1) Infrastructure, 2) Teachers welfare, and 3) Student’s welfare. Some of our key achievements are:
We embarked on massive renovations and rehabilitation programs in over 80 schools across our 21 LGAs.

We equally invested in 60 state-of-the-art science laboratories in our secondary schools across the state.

We constructed over 720 classroom blocks in government owned primary schools across all local governments in the State.

We sustained the provisions of incentives to our teachers of core subjects of English, Mathematics, Sciences and Igbo language. In addition, our teachers who reside in the hard-to-reach areas also received 20% of the basic salaries as incentives. We also introduced a similar incentive for teachers teaching in all government owned schools for the physically challenged in the State.

We have successfully been granted accreditations by the National Board for Technical Education in nine key subjects in three of our technical colleges – Government Technical College (GTC), Umeri, GTC, Nkpor and GTC, Umuchu. It is pertinent to note that on assumption of office, none of the 11 technical colleges in the state had any sort of accreditation. Till date, we have successfully accredited four technical colleges.

Last but not the least, all these investments have manifested in awards, encomiums and global recognition of our children in debates, quizzes and other competitions.

In the health sector, my administration embarked on numerous developmental initiatives aimed at improving the quality of healthcare services for Ndi Anambra. Some of our major achievements are:
We rehabilitated 10 maternal and child health centres in 10 communities across the State.

We commenced the first phase of our primary health centre (PHCs) rehabilitation program across our three senatorial zones. We have already completed 41 facilities while 21 facilities are very close to completion. The aim is to ensure that each of our 326 political wards has a functional and well equipped PHC.

We completed the renovation of general hospitals in Umueri, Atani, Nanka and Umunze. 15 other general hospital renovations are ongoing and we expect to complete all by the end of 2017 fiscal year.

My administration disbursed N747m to Mission hospitals in the State for improved health care service especially for the provision of medical equipment and infrastructure in their hospitals.

Also, we commenced the construction of an oxygen production plant at the Chukwuemeka Odumegwu University Teaching hospital in Amaku. The aim is to supply oxygen to all 1,562 private and public hospitals in Anambra, thereby, reducing the incidence of numerous deaths caused by unavailability of oxygen.

Lastly, earlier this year, we presented this Honourable House the Anambra Health Insurance Scheme bill. This initiative, once passed and implemented, will transform the workings and effectiveness of our health sector. It will ensure that all facets of the society, including the vulnerable and poor have sustained access to affordable healthcare services.


Madam Speaker and Honourable Lawmakers, the budget I have the honour of presenting to you today, is titled - Budget for Economic Recovery and Inclusive Growth. It is my administration’s response to the very difficult economic situation forced upon us by the present Recession. Yet in this budget as in the ones before it, our primary focus remains the development of Anambra’s economy and the laying of a foundation for a future we can all be proud of. I speak of a future of job increases and improved social welfare. But progress in these areas will be very difficult in the coming months. My administration will have to work harder to establish economic stability in Anambra amidst a deteriorating national economic environment and empower our people to thrive in challenging times.

Fellow citizens, for us to make any real progress, we must put aside self-interest and face each other openly and honestly on the table of brotherhood. We must resolve to optimize the allocation of government resources for the collective good of Ndi Anambra while broadening our economic support mechanisms. That has all been factored into the 2017 fiscal plan and will require an 11% increase on the previous year to achieve our plans for economy recovery.


Policy Thrusts

Madam Speaker and Honourable Members, while preparing the 2017 budget, we were guided by the following policy thrusts:

Firstly, a more optimal Resource Allocation strategy with deeper emphasis on our economic pillars and enablers.

Secondly, stronger Collaboration with the Federal Government, particularly in the areas of Social Investment, Works & Infrastructure, Education, Healthcare and Environment.

Thirdly, a more holistic approach to Development Partnership Interventions that will elicit greater support to the socio-economic sectors particularly in the areas of poverty alleviation and eradication schemes, community-driven infrastructure programs and youth empowerment schemes.

And finally our fourth target outcome will be to transform our Public-Private-Partnership Strategy, improving our oversight of existing projects and attracting new investments to fuel economic recovery and growth.

FY2017 Supporting Assumptions

Madam Speaker and Honourable Lawmakers, we have based our 2017 Draft Estimate, on the following key assumptions:

We project a crude oil price benchmark of $42 per barrel having observed a rebound of oil prices from $29.7 per barrel in January 2016 to $46.4 per barrel as at late November, 2016.
Daily crude oil production has been estimated at 1.92 mbpd based on improving oil recoveries as a result of Federal Government’s continued efforts to address insecurity in the Niger Delta region.
The average Naira: Dollar exchange rate has been estimated at N305 to a Dollar.
Value added tax is projected at N850m monthly, which represents a 10% increase on our 9 months actual, up from the 2016 average of N770m and it is predicated on the effectiveness of reforms that FIRS has already commenced.
Based on the above, our Federal Allocation receipt for 2017 is estimated at a conservative figure of N40.2bn, which is an increase of 20% on 2016 annualised actuals.
We have projected N20.4bn for internally generated revenues in FY2017, which is an increase of 26% on 2016 annualized actuals. Madam Speaker, you may recall that:
we suspended the collection of taxes imposed on hawkers and wheelbarrow pushers in our markets,
reduced taxes for Okada and Keke drivers, and
suspended the sale of consolidated emblems as a result of the current economic recession.
I therefore state categorically that we will not increase or reintroduce any of the above taxes. Our expected growth in IGR will be driven by the introduction of revenue courts to enforce payment of tax-debt by blue-chip companies (mainly the banks and telecommunications companies) and elimination of revenue leakages.
Domestic Borrowing will be maintained at N10bn with expectations of Federal government refunds of N12bn on Paris Club debt and N15bn on infrastructure provided by the state on behalf of Federal Government. The outstanding refundable amount to Anambra stands at N43.8bn today for infrastructure provided by the state on behalf of Federal Government.
Development partners are expected to provide N12bn in counterpart funds and grants.
On the expense side, Personnel costs are projected at N17.7bn to account for staff salaries and promotions during the year.
Social benefits expenditure which includes pensions, gratuities, etc. has been projected at N10.2bn.
Overheads are estimated at N18.4bn, a slight increase over the FY2016 budget. The projection is to accommodate the high inflation recorded over the last nine months.
The Capital Expenditure Estimate geared towards realizing economic recovery is estimated at N58.9bn, which is a 11% increase over FY2016.

FY2017 Budget Envelope

We are proposing a budget size of N115.5bn for the 2017 fiscal year. Of this amount, the state expects to spend N56.6bn on Recurrent Expenditure and N58.9bn on Capital Expenditure, reflecting the focus on significant infrastructural development during the year to stimulate the local economy towards recovery. As was the case in 2016, we will continue to prioritize production over consumption targeting a recurrent to capital expenditure ratio of 49:51.

Here are a few highlights of our Sectoral Capital Plans:

Works & Infrastructure

Road construction and rehabilitation, at N24Bn will account for a significant proportion of planned Capital Expenditure in 2017 and will be focused on the completion of on-going road contracts awarded by the last and current administration in line with our Continuity Promise to Ndi Anambra and our Economic Blueprint.

Agriculture and related Sectors

In agriculture, we are aiming to become a top 3 producer of rice, maize & cassava. To achieve this, we have increased our budgetary allocation to agriculture by over 500% to N5.4Bn compared to 2016. We are making strategic investments to improve rice production in Anambra State to ensure we reach and surpass local consumption capacity of 320,000MT. We also plan to rehabilitate, equip and upgrade the College of Agriculture, Mgbakwu, increase funding for fertilizer procurement and distribution to rural farmers, create and fund the Fishery Development Youth empowerment scheme and other agricultural programs. Under our community development program, we intend to develop over 3,000 hectares of land in partnership with our development partners (FADAMA, IFAD, etc.)


We plan to spend N3.4Bn in Education to support the improvement of teachers’ welfare, students' welfare and educational infrastructure. More specifically, we will build on our 2016 activities to incentivize and deploy teachers to rural/hard-to-reach areas; finalize the re-tooling of Special Education centres as well as provide grants and scholarships to exceptional students.

Youth Empowerment and Social Investments

Given the current economic situation, increased spending on youth empowerment and social investments will help ameliorate the impact of the recession on our unemployed youth, poor and most vulnerable. We are planning to significantly increase spending in social development and Youth empowerment to N1.6Bn in 2017 in line with the objective of stimulus package; which aims to deepen government social welfare activities amidst the challenging economic situation.

We are also working closely with the Federal Government to roll-out various social investment programs such as The Home Grown School Feeding Program which will feed approximately 80,000 pupils and employ 1,000 Teachers and The Conditional Cash Transfer Program (“CCTP”) which will provide N5,000 naira each to more than 10,000 poor and vulnerable households across twenty-one (21) LGAs. In a few months, we will commence the rollout of the World Bank-assisted Community Social Development Program (CSDP) which will provide approximately N1.5bn in counterpart funds for projects in rural communities in Anambra. We also plan on implementing another round of the N20 million choose-your-project community program to enhance rural infrastructure in the State.

Trade and Commerce.

In trade & commerce, we will kick start an innovative project to help develop markets across the state. Each of the 61 major registered markets in the state will be offered an opportunity to implement a project of their choice at a cost not exceeding the sum of N10m to enhance the environment of the market.

Water Resources and Utilities

In the area of water resources and public utilities, we plan to rehabilitate and operationalize over 160 uncompleted water schemes in the State, and develop effective water reticulation networks in the State. We also plan to sustain our street lighting program across additional towns in the state. We expect that this investment will further reduce criminal activities, sustain the growth the night economy and enhance the overall aesthetics of our dear state.

Madame Speaker and Honourable Members, further details of our planned capital expenditure during the 2017 fiscal year can be located in the attached appendix.

Madam Speaker and Honourable Members of this esteemed Assembly, fellow citizens, the Budget package that I lay before you today is a bold attempt to interpret the hard choices we must make to lift our beloved state out of the corrosive effect of the Recession in our country.

It is a budget that lays emphasis on prioritization as a creative means of ensuring impact and effectiveness in a recessional economy. But it is also a budget that will be essentially driven by innovation and our people’s well-known ability to rise above adversity and expand the boundaries of human progress.

I have no doubt whatsoever that this budget will serve as an all-important compass, guiding the activities of government in these trying times into a new phase of economic prosperity.

I eagerly look forward to a swift consideration and passage of this Budget to enable us sustain and surpass the pace of progress in Anambra State… The Light of the Nation!

God bless Anambra!

 God bless Nigeria!

I thank you all.

Chief Willie Obiano, FCA

 Governor, Anambra State.

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