Repositioning Ogun with N221bn Budget in 2017

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Determined to consolidate on the gains of the previous years, Ogun State government has proposed an ambitious budget with spirited moves to bolster the revenue base with a view to supporting the aspiration, reports Kunle Aderinokun

Before Governor Ibikunle Amosun took the rein of power in Ogun State in 2011, he was desirous of realising the huge economic potential inherent in the state, which is abundant in natural resources and replete with income generating business opportunities.

As soon as he mounted the saddle, he swung into action with a view to ensuring Ogun, a next door neighbour to Lagos, is in the league of high revenue generating states and become successful economically. No wonder, with ingenuity of the team he leads, the state has moved from an internally generating revenue (IGR) base of N730 million per month in 2011 to the current level of about N5.5 billion monthly.

This, in addition to receipts and other revenue sources put the government in a comfortable position to deliver the goods to the people of the state. According to the Commissioner for Finance, Wale Oshinowo, who analysed the proposed 2017 budget and fielded questions select journalists recently in Abeokuta, the state achieved this feat over these years because of revenue harmonisation, which helped to plug leakages in ministries, departments and agencies. With the harmonisation, he pointed out, the government also succeeded in avoiding multiple taxation between the states and local government areas (LGAs).

Besides, the administration, in its wisdom, created more revenue lines to increase income generation. For instance, the state government, since the first term of Amosun, has an initiative called residency tax law , which mandates Ogun state residents to pay their personal income taxes to the state’s coffers regardless of where they work. This initiative has significantly boosted the revenue base of the state. Similarly, the implementation of Home Owners’ Charter initiative in which currently over 600, 000 applications are being processed for certificate of occupancy, the Land Use Act and introduction of Okada Rider’s Permit, which generated N1 billion in nine months as well as Treasury Single Account(TSA) and cashless payments in all Tertiary Institutions also raked in significant revenue to the treasury. These efforts have given fillip to the state’s resource base, which according to Osinowo, has been soundly managed and made the state buoyant.

Not done yet, the state government, in its 2017 budget has projected to raise the level of its IGR to N114.34 billion from the N105.67 billion targeted in 2016. While presenting the 2017 appropriation bill, estimated at a total of N221.129 billion, to the House of Assembly, Amosun had expressed the belief that, “Ogun State is on the threshold of an important phase of its transformation journey and the expenditure plans that we seek to focus upon in Fiscal Year 2017 will be critical in repositioning our dear state.” According to him, “This next phase of our journey will be unlocked by the provision of critical infrastructure alongside the facilitation of more inclusive economic growth for our people and this must therefore be our emphasis.”

The proposed budget titled ‘Budget of Repositioning’, he pointed, reflected the administration’s “resolve to further minimise costs and continually maximise and diversify our capacity to generate revenues.” Stating that, the N221.129 billion budget represented an increase of 10.45 per cent over the 2016 budget, Amosun disclosed that, out of the whole size, a total of N118.306 billion has been proposed as capital expenditure while the remaining N102.82 billion was earmarked for recurrent expenditure, representing 53.50 per cent and 46.50 per cent of the total budget, respectively. The recurrent expenditure comprises personnel cost, made up of salaries and allowances put at N62.73 Billion while pension and gratuities accounting for N11.2 billion, which is about 5.06 per cent of the total expenditure.

The balance of N28.89 billion, which accounts for 13.07 per cent is set aside for the overhead costs. Explaining why a greater portion of the budget was dedicated to capital expenditure, Amosun said, “Our intention to reposition the state’s economy requires us to continue to place greater emphasis on capital expenditure. This budget mix will support both the maintenance of existing infrastructure and allow the continued execution of more capital projects.” Essentially, the governor pointed out that, the proposed budget was allocated to five cardinal programmes .

According to him, the programmes are: Affordable Qualitative Education (N47. 054 billion), Efficient Healthcare Delivery (N15.105 billion), Agricultural Production/Industrialisation (N11.610 billion), Affordable Housing & Urban Renewal (N28. 575 billion), Rural & Infrastructural Development/Employment Generation (N44.201 billion) with others N74.584 billion. On budget financing, Oshinowo, the commissioner for finance, said the government planned to fund the proposed budget without depending on allocation from the federation account. He explained that the on-going revenue drive in the state would be accelerated to ensure the government achieve the targeted level of revenue and even surpass it.

According to him, the government would in 2017, continue to generate more funds through the expanded revenue lines it had created with a view to meeting its obligations and aspirations of its people. Apart from the N114.34 billion IGR, the government proposed to generate, which represents 51.71 per cent of projected revenue, it also envisaged to receive N41 billion from Federation Account (18.54 per cent). Besides, the government expected capital receipts of N65.78 billion, accounting for 29.75 per cent of the proposed total funding.

In his concluding remarks at the budget presentation, Amosun gave assurances of “our collective responsibility to ensure the success of this budget.” Besides, he said: “To the good people of Ogun State, let me also seize this opportunity to assure you of our unwavering resolve and commitment to deliver on our priorities and complete on-going projects.” “While thanking our people for their perseverance and understanding, we are mindful of the fact that these are indeed hard times.

That notwithstanding, let me assure our people that we will continue to walk our talk in the development of our rural road network across the State. “We are convinced that, what we have been able to achieve in the past five and a half years will soon pale into insignificance when compared to what is yet to come. We will leave no one in doubt about our genuine intentions to work for the development of our dear state. I strongly believe that God willing, with determination and our collective effort, we shall succeed in the desire to sustain the growth of our dear state,” he added.