Abia State House of Assembly Plenary for Tuesday, 14th December, 2021.
Welcome to another Legislative Day in the 7th Abia State House of Assembly.
The Speaker, Rt Hon Engr Chinedum Enyinnaya Orji led Principal Officers into the hallowed chamber.
Rt Hon Kennedy Njoku, Member representing Osisioma Ngwa North State Constituency led the opening prayer.
The Abia State House of Assembly commenced plenary after the adoption of Votes and Proceedings of Wednesday 8th December, 2021.
In the absence of any Announcement, Petitions, Matter of Urgent Public Importance and Personal Explanation, the Speaker asked the Clerk of the House to read out Items on the Order Paper.
ORDER OF DAY.
H.A.B. 31 : The Abia State Environmental Trust Fund Bill.
A Bill for a Law to Establish the Abia State Environmental Trust Fund ( ABSET ) sponsored by Hon Kelechi Onuzuruike, Member representing Umuahia North State Constituency.
The Bill was deferred to be considered on another Legislative Day.
PRESENTATION OF THE 2022 ABIA STATE DRAFT BUDGET BY THE STATE GOVERNOR, OKEZIE VICTOR IKPEAZU PHD
In a motion moved by the Majority Leader, Hon Solomon Akpulonu and seconded by the Minority Leader, Hon Chijioke Chukwu, the House dissolved into quasi session for the purpose of allowing the Governor to present the proposed 2022 Budget.
The Governor was therefore ushered into the hallowed chamber by the Sergeant-At-Arms.
Governor Full Address:
2022 ABIA STATE BUDGET SPEECH
BUDGET OF RECOVERY THROUGH INDUSTRIALIZATION AND INCLUSIVE GROWTH
PRESENTED BY OKEZIE VICTOR IKPEAZU, PH.D
GOVERNOR OF ABIA STATE, NIGERIA
TO THE 7TH ABIA STATE HOUSE OF ASSEMBLY,
ON TUESDAY 14th, DECEMEBER, 2021
I have the honour to present for the fiscal year 2022/2024, Abia State Budget Proposals (Estimates) to this Honourable 7th Abia State House of Assembly.
Mr. Speaker, Honourable Members of the Abia State House of Assembly, on this occasion, I wish to commend your efforts in the early passage of the 2021 Appropriation Law which we began implementing on 1st January, 2021. This feat has restored the January-December fiscal year budget cycle in Abia State. The Executive, led by myself, are grateful for this achievement and trust that we will all will join hands to sustain it.
I will proceed to present the highlights of the State 2022 draft estimates and budget proposals. As is our tradition, the Honourable Commissioner for Finance will later provide the full details of these proposals in his breakdown.
The Operating Macroeconomic and Social Environment
Mr. Speaker and Honourable members of the 7th Abia State House Assembly, we are all aware of the changes that have occurred in the global socio-economic environment since the year 2019.
For the past two fiscal years, economies at all levels have battled the menace of Corona Virus (COVID-19) pandemic. Households, firms and Governments across all countries have all suffered in one form or the other from the effects of the pandemic. Several Governments at diverse levels, including Nigeria, also took swift and drastic actions to curb the spread of the disease.
But even as we prepare for 2022, the dangers do not appear to be completely over; the socioeconomic and business environment is yet to be fully clear. At the moment, some countries have locked down again, travel bans have become intensified and diverse containment measures are again being put together by different Governments to mitigate further damage to both their citizens and economies. No one is as yet sure of the full import of the latest evolutions in the COVID-19 for the 2022 fiscal year, but one thing remains sure, we must remain pragmatic to ensure that Abia’s human capital, which is its most important asset, are preserved by all means possible.
Oil prices and sales have marginally recovered, providing partial recovery in receipts from the Federation account for all tiers of Government in Nigeria, but the need for diversification continues to stare all facets of the economy in the face. The mono-product export composition and diversified import structure of the Nigerian economy have translated to different socio-economic ills, not the least rising unemployment, with the attendant threat of restiveness and insecurity. But equally dangerous is the rise in inflation across products and sectors. The later has drastically reduced the purchasing power of Nigerians in recent times, putting immense pressure on welfare of the people and forcing Government to innovate on options for dealing with the situation or risk further economic downturn and increased poverty among our people. However, the risks remain very high, particularly for low and middle income countries. With the depth of effect of COVID-19 on businesses, travels, hospitality and tourism industries, households and even the self-employed, it will surely take a while to recover completely due to the mutations and emergence of new variants.
Abia State Long-Term Development Plan
In response to all the above, and in its bid to recapture lost grounds and proactively capture the future, the State, in collaboration with the Partnership Initiatives in the Niger Delta (PIND), developed and launched the Abia State Long-term Development Plan, a policy document which adopted a bottom-up approach to lay a foundation that would translate the gains that have been made in the recent past into sustainable long term growth. For the next 30 years it will remain our guide to development planning and administration. It will also serve as an instrument of engagement with local and International Development Partners. Stakeholders in the Abia project all agreed that it will be needful to jointly evaluate progress made under the plan every five years and review the targets and strategies as need arises. That document will soon be brought to this Honourable House for passage into law as part of the sustainability plan. I wish to request ahead of time for the usual support of the House to make this a reality.
Additionally, in partnership with the United Nations Industrial Development Organization (UNIDO), the State designed an Industrial Policy, meant to guide engagement and utilization of resources for industrial growth of the State. The aim is to rightly position Abia as the industrial hub of Nigeria, a position we are convinced it has the capacity to occupy.
The contents of these 2022-2024 Multi-year Budget Estimates were taken from the long term plan document. It will be important, and I solemnly recommend, that every stakeholder and each arm of Government are acquainted with the provisions of that plan with a view to contribute to its full realization. Partly because that document has provided a firm compass for the future, we have recently seen some Development Partners, including the United Nations Development Programme, buying into the mission of this administration and willing to get into longer term development programming with the State.
A few weeks ago, in Durban, South Africa, the African Export Import Bank (AFREXIM Bank) signed a deal on the funding and realization of the Geometric Power project at Aba and its environs. Achieving this milestone will go a long way in addressing the challenges of providing power infrastructure and boost all spheres of economic activity, particularly the small and medium scale businesses that are worst impacted by the unstable power situation in the country, and most of which form the bulk of operators in Abia State.
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.
1. 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.
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
● 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)
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.
Responding, the Speaker, Rt Hon Chinedum Enyinnaya Orji, thanked the Governor and his team for the efforts put in to make the draft Budget available and promised that the House would work conscientiously to ensure the Budget is passed in good time and for the benefit of the people. He enjoined the Governor to ignore naysayers and remain focused on his vision and ensure that he finishes strong. He reiterated the commitment of the House to support him in achieving his goals for the State and urged the him to ignore those who are working very hard to sow seeds of discord between the Executive and the Legislature.
In a motion moved by the Majority Leader, Hon Solomon Akpulonu and seconded by the Minority Leader, Hon Chijioke Chukwu the House reverted back to plenary.
Hon Solomon Akpulonu, Majority Leader of the House, moved that plenary be adjourned to another Legislative Day.
The Minority Leader, Hon Chijioke Chukwu seconded the motion.
Plenary was therefore adjourned to Wednesday, 15th December, 2021.
After the plenary session, the Speaker and members of the House of Assembly had an open meeting with the Governor and thereafter took him (Governor) on a tour of the Assembly Complex.
Courtesy: Media Unit, Office of the Rt Hon Speaker, Abia State House of Assembly.