El-Rufai Signs N171.7bn 2016-Budget Into Law

Then the former Federal Capital Territory (FCT) Minister, Malam Nasir Ahmad El-Rufai emerged winner of the March 28, 2015 gubernatorial elections in Kaduna State, expectations were high that the state will witness rapid development Kaduna under him.

If for nothing, his campaign slogan: ‘Let’s make Kaduna great again,’ prepared peoples’ mind that he would deliver the goods.

Though nothing much has been achieved in terms of infrastructural development within the last seven months of his administration, El-Rufai has been busy reversing what he termed ‘negative state of Kaduna’ that he inherited from Mukhtar Ramalan Yero led-PDP government.

According to El-Rufai, his government inherited a primary education, where more than 50 per cent of the primary school children sit on the bare floor to take lessons. A health sector where average of 103,000 women die annually, during child birth. A security situation where killings in Southern Kaduna, cattle rustling and robbery in Birnin Gwari area had became the order of the day.

Thankfully, Governor El-Rufai had facilitated joint security measures by concerned Northern Governors to end crime in Birnin Gwari’s Kamuku Forest and equally empowered security agencies with patrol vans and equipment to stop incessant killings in Southern Kaduna.

Though El-Rufai’s government is to spend N171.7bn in 2016, which is N32bn short from Governor Yero’s 2015 budget, hopes are high that by the end of 2016, El-Rufai would have made significant progress in terms of infrastructural development in Kaduna State.

It is widely believed that beautiful budget proposal is not what matters, but implementation of such. But, if El-Rufai’s commitment so far demonstrated, is sustained, Kaduna will truly be great again.

Against the usual practice, the governor took his proposed budget before the people of the state for their input before presenting it to the state House of Assembly.

Addressing stakeholders during the town hall meeting which took time to x-ray the proposed budget, El-Rufai in his speech titled, ‘Putting the people first: Back to budget realism,’ said previous administrations in the state had reduced budgeting into a “fictographic art, with scarcely any relationship to reality.”

El-Rufai alleged that, huge annual budgets were approved in the past without being implemented, leaving a legacy of abandoned projects.

The governor who pointed out that he would always put the people first in all his actions, however maintained that, “the present administration is determined to make the state great again by reversing the neglect that the public interest has suffered and restore hope.”

He said in the proposed 2016 budget, one of the pro-masses programmes, included interventions in school feeding, planting of economic trees, and waste collection, which are expected to create 200,000 jobs.

According to El-Rufai: “We have called this meeting today to present to you the broad principles informing the policy choices that are reflected in the draft 2016 budget. The budget is anchored on the commitments outlined in the Restoration Programme, the manifesto platform on which the Kaduna State APC campaigned.”

While shedding more light on the principles behind the draft 2016 budget, he recalled: “When we formally launched our election campaign, we made it clear that the APC believes in the capacity of our people to make the best choices for themselves, if they are properly educated, given decent healthcare, and jobs in a secure environment.”

Expatiating, he said: “As I asked in an earlier speech, how can the political elite justify spending public resources mainly on an influential minority? Is it fair or justifiable that the voters should be without stake in a system that draws its legitimacy from their mandate? And this selfishness was practiced openly.

“Year after year, only the recurrent part of the budget attained perfect performance. Capital investments repeatedly suffered, sometimes reaching only one percent in some sectors or 17 percent performance overall. They had reduced budgeting into a fictographic art, with scarcely any relationship to reality. Huge annual budgets were approved without being implemented, leaving a legacy of abandoned projects.

“We knew we had to reorient the whole thrust of governance, replacing it with a culture that puts the people first. Democracy construes the people as the masters; we must obey their command to improve their lives.”

In his determination to determine the precise number of public sector employees and pensioners in order to plug leakages, he said certain measures were taken such as prohibiting the collection of cash revenues by MDAs and the prompt execution of the TSA, which is the umbrella view of public finances that provides the basis for the transition to zero-based budgeting.

“This has allowed us to ensure that every capital line item enhances delivery of our priorities. We have firmly rejected the incremental budgeting framework, which could only yield dismal results because its numbers were never anchored on actuality or reflective of performance.

“The 2016 budget moves away from funding government to providing infrastructure and services to citizens. It restores the 60:40 ratio in favour of capital expenditure. This is in keeping with our agenda to expand access to education, healthcare, jobs and security.

“Our pro-poor programmes, including interventions in school feeding, planting of economic trees, and waste collection are expected to create 200,000 jobs. These investments in infrastructure and human capital are calculated to help the state grow at a rate that significantly surpasses the national average.”

Under capital investments, El-Rufai said the state government would plough resources on comprehensive security interventions in partnership with neighbouring states; textile revival; youth entrepreneurship programmes; provision of streetlights; the statewide tree planting programme.

Political appointees, he declared, would take pay cuts as sacrifice for change.

“There will be no automatic annual salary increments in 2016. Duty tour allowances and estacode rates are to be reduced as well,” he said.

The budget was later presented after little adjustment was made by the stakeholders during the town-hall meeting.

El-Rufai told the assembly that, following the town hall meeting and other public consultations, the executive had revised upwards the capital estimates to accommodate projects like the reconstruction of the collapsed dam in Birnin-Gwari, clearance of inherited arrears on Zaria Water project and construction of access roads that will bring the Kagoro Hills tourism project closer to realization.

According to him, “Mr. Speaker, honorable members, the 2016 revenue and expenditure estimates add up to N171.7 billion, comprising N109.3bn (64%) capital and N62.4 (36%) recurrent components. Our fiscal assumptions are based on a conservative benchmark crude oil price, at about US $39.50 per barrel. Any excess revenues arising from oil price appreciation will be saved and accounted fully to this Honourable House for supplementary appropriation if needed, as required by the Constitution before spending.

“With your accelerated passage of our fiscal responsibility, land administration and tax reform bills into law this year, we intend in 2016 to grow internally generated revenue such that it attains parity with federal statutory allocations. Our intention is to be paying all public service salaries from IGR by the end of 2016.

“We have found increased resources for capital expenditure only by severe cost-cutting. In the 2016 estimates, we have decreased recurrent expenditure by 50% of the 2014 actuals. Government House expenses for 2016 are projected at N563.7 million, a 70% cut from the N2.1 billion that the previous government spent in 2014, the same year that they appropriated only N300m to Ministry of Health for capital projects.

“The draft budget allocates resources in strict conformity with our prioritisation of necessary interventions. We have therefore proposed the following spread of capital investments: Education with N27.5 bn for the renovation and reconstruction of schools; primary school feeding; uniforms and tablets for secondary school students; and provision of school furniture. The public has responded with enthusiasm to our free education policy by raising school enrolment rate by 50%. We have a duty of continuous investment in this sector to reduce current congestion and improve quality.

“Health with N6.6bn for 255 primary health care centres (one in each ward), modernised, equipped with items like ultrasound scans and other tools that can assist safe deliveries; upgrade of 23 rural hospitals and refitting of our general hospitals;

“Works, Transport and Housing to take N31bn for: Transport: A rapid rail transit system for Kaduna metropolis;

Roads: Township Roads; reconstruction within our major urban centres, and continuation of selected roads that link our many population and farming centres. Street lighting, in our major urban centres to improve security, encourage our economic activities at night, and enhance quality of life;

“Public Housing through PPP with interested developers packaged with mortgages to enable our civil servants and citizens purchase homes and pay over 15-20 years,

“The establishment of a Facilities Management Agency to professionalise and centralise the maintenance of government assets for efficiency and effectiveness;

“Rural feeder roads to connect our major agricultural and commercial settlements that build on the successes of the World Bank-financed RAMP 1 in the state.

“Water with N11.4bn for Zaria Water project arrears and current payments, waterworks rehabilitation projects in Ikara, Kafanchan, Kagoro, Kaduna, Kwoi, Manchok, Saminaka, the old Zaria plant and the ABU Samaru waterworks. Investments towards the completion of the Zaria Water Project will continue on a focused manner. RUWASSA will continue investments in rural water supply and rehabilitate all borehole projects that have gone into disrepair or needing maintenance. During 2016, we hope to restructure the water sector based on the Water Supply Bill that will be before this Honourable House to ensure the financial sustainability of the State Water Board.

“We are supporting Agriculture with N5.5bn with a price support system to guarantee minimum prices for our farmers at the beginning of the farming season for grains and other produce.

“Availability of low-interest loans for our farmers generally, and for MSMEs, rice production, commercial agriculture and the introduction of a private-sector driven statewide tractor hiring scheme.”

On other flagship capital investments, Governor El-Rufai told the assembly that, the Kaduna Geographic Information Services (KADGIS) will develop and manage a centralised, electronic land registry to provide marketable titles for all land owners, including farmers while raising significant revenues from ground rents, land use charges and titling fees for the benefit of the State and Local Governments.

He equally promised to replicate the success of the Pampaida Millennium Village in selected rural communities across the state in a phased manner, with the support of domestic and international donors.

Another planned project according to El-Rufai is a Kaduna Ring Road, a 90km toll road that will link the Eastern and Western sectors of Kaduna from behind Rigasa and across River Kaduna beyond Millennium City.

“The project is intended to be a PPP and discussions have advanced with domestic and international firms to begin construction in 2016. The amount in the budget is for feasibility studies and engineering designs plus equity contribution for the project’s take-off.”

In order to provide avenues to engage youths and develop talent in sports, El-Rufai has hinted of plans to establish a Sports Academy in the State. Already, the site for the Academy has been identified along Kaduna-Abuja Road and a provision of N30,000,000 has been made in the 2016 budget for planning and preliminary design of the Academy.

However, as the budget is being signed into law after record breaking speedy passage by the State Assembly, fascinating facts that continues to stand El-Rufai’s maiden budget out and rekindle hope for development are his courage to take the budget before the citizens for inputs.

Unlike in the past, this time around, N109.3b, representing 64% of the total budget is for capital projects, while, N62.4bn, representing 36% goes for recurrent expenditure.

Another thing is that, El-Rufai’s government has been able to cut the recurrent expenditure, by N10.4bn without downsizing the workforce.

In terms of spending priority, Education will gulp N27.55bn, second to only Works, which encompasses housing and transport projects, which is getting N31.35bn.

El-Rufai is also proposing the sum of N22.48bn for general administration, which covers capital projects of departments under the governor’s office including Lands, Rural Devt, KASUPDA, Public Affairs, among others.

While some are still wondering how the government intends to generate money to finance the budget, believing that the dwindling oil revenue will affect all state governments negatively, El-Rufai’s administration said it is working seriously on alternative sources of revenue.

El-Rufai is hoping to raise the Internally Generated Revenue (IGR) to N45.77bn from the present state of about N15.5bn. While some critics say this impossible, others who are familiar with El-Rufai’s antecedence believe he can probably do better.

The government is also expecting N33.79bn statutory allocation from the federation account, N12.63bn from Value Added Tax (VAT), and N40.68bn deficit funding from grants and loans and N38.8bn Opening Balance, making the total balance of N171.7bn.