RIVERS STATE BUDGET OF REASSURANCE – ANALYSING THE ₦530 BILLION EXPENDITURE
Rivers residents commend Chief. (Barr) Nyesom Wike (Mr. Project) for the huge capital expenditure in the Rivers State budget targeted to boost investors’ confidence in the state.
Mr. Project signed the 2020 Rivers State budget of ₦530,813,357,619 into law after being passed by the State House of Assembly last year.
The Rivers State budget of reassurance is aimed at sustaining the development of the state, with an appropriated recurrent expenditure of ₦156.6 billion and capital expenditure of ₦374.1 billion.
Recurrent Expenditure is an expenditure that does not result in the creation or acquisition of fixed assets. It consists mainly of expenditure on wages, salaries and supplements.
Capital Expenditure are funds used to acquire, upgrade, and maintain fixed assets such as roads, buildings, ports,
airport and other infrastructure.
The capital expenditure will stimulate the economy and enhance development of the state, thereby, building on the current successes recorded in 2019.
In the 2019 Rivers State budget, government budgeted ₦480 billion towards ensuring that capital projects like the three (3) flyover bridges were awarded to boost economic activities of the state.
These infrastructure projects ensured that the economic activities within the state were sustained despite the nationwide economic hardship.
Government spending through capital projects are important for boosting economic activities in the fight against recession.
Allocating the Capital Expenditure
In the 2020 Rivers State budget, Mr. Project set aside the following capital expenditure for infrastructure within the state.
Ministry of Works ₦ 93,968,823,766.60
Bureau for Special Projects ₦ 26,087,783,322.35
Ministry of Transport ₦ 3,000,000,000.00
These allocations have been provided to fund strategic road development programme, complete key ongoing projects and rehabilitate key infrastructures within the purview of the ministries. The long list of projects to be completed is a commendable effort by the state government, seeing that each local government has at least one project. Thereby, ensuring that all 23 local governments feel the state government’s impact for inclusive growth.
In the budget, the government hopes to invest in boosting the agricultural sector with ₦40 billion, which will be partly used to complete the Cassava Processing Plant in Afam. The Rivers State Government is making great strides in agriculture, but there is room for more improvement as the opportunities are bountiful.
In 2019, BUA Group completed their USD 400 million food industrial complex in Port Harcourt which contains the largest sugar refinery, flour milling and pasta processing plants in Nigeria. This huge investment in agriculture will boost the economy of the state, while positioning the region as the food basket of the South with the potential of raising billions of Naira in taxes.
The Importance of SMEs in funding the Rivers State Budget
It is important to note that at the end of October 2019, total net revenue generated by the state in the year stood at ₦261,074,352,792.23;
FAAC ₦ 37,102,734,345.42
13% Oil Mineral Fund ₦ 79,794,256,970.19
Taxes ₦ 90,923,318,238.78
VAT ₦ 14,666,472,353.79
Paris Club Refund ₦ 600,000,000.00
Local Credit ₦ 25,000,000,000.00
Exchange gain and Others ₦ 7,496,428,837.31
It is obvious from the figures that government needs to continue its effort in making it easier for residents to do business in Rivers State.
According to Prof. Oboada Uriah, an economic analyst and lecturer at the Ignatius Ajuru University; “only a collaboration between the government, private sector and civil society is capable of reducing the number of Nigerians living in abject poverty.” Mr. Project understands this fact, and has made commendable efforts in partnering with the private sector.
In November 2019, Governor Wike commissioned the new Alcon Nigeria Limited Low Voltage Panels Assembly Plant in Port Harcourt. An important partnership by the current administration in supporting private sector efforts in reviving the manufacturing sector of the state.
Mr. Project also commissioned the Maiden NLNG DLPG Delivery to Stockgap Terminal in Port Harcourt. This was a landmark achievement brought about by government’s development of critical infrastructure.
The developmental efforts in Rivers ports is drawing investor interest. Terminal operators and importers are making arrangement to commence importation at the ports in Rivers State, rather than going to Apapa or Tin Can Ports where port charges are very high. Port traffic in Rivers state improved in 2019 with 1,870,379 compared to 1,723,169 in 2018.
This increment has been brought about by improved security on the waterways. According to Engr. Yunusa Ibrahim Anji, Port Manager, Rivers Port Complex; “We have patrol boats manned by the marine police and we have also deployed the services of the Navy to patrol our waterways and channels”
In essence, government needs to partner with the private sector to surpass the 2.1 per cent growth expected by World Bank, as stated in its January 2020 Global Economic Prospectus. So far, the National Bureau of Statistics continues to report growth in the nation’s Gross Domestic Product (GDP); which in the third quarter of 2019, in real terms grew by 2.28 per cent (year-on-year).
These statistics show that there is great potential for growth in the Nigerian economy. It is imperative, that Mr. Project continues in his efforts in positioning the state to reap maximum benefit from the next wave of economic activities as the economy recovers.
Rivers residents need to support the government in these developmental efforts by kicking against corruption and taking responsibility for ensuring that these infrastructures are maintained. The idea of extorting construction companies building these infrastructures should be discouraged. More so, it is important that residents dispose refuse properly so that they don’t end up blocking drains, thereby causing flash flooding that spoil our roads.
Mr. Project has played his role by setting aside 70 per cent of the total budget for capital expenditure. Rivers residents should therefore play their own role in reassuring foreign investors! #OurStateOurResponsibility
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