ONDO State Governor, Arakunrin Rotimi Akeredolu, towards the twilight of last year presented the 2019 budget estimates before the State House of Assembly for appraisal.

TAGGED Budget of Rapid Development, the proposal of N190.023 billion, is higher than that of last year budget of N181.425, representing an increase of 4.7%.

THE budget, according to Akeredolu, is to make the state a model in industrial revolution, consolidating and building on the feats achieved in 2018.

WITH N87.906 billion of the total budget earmarked for capital expenditure, the state government signposts its commitment to complete all the ongoing road projects, promote functional education and technological growth, reduce reliance on federal transfers through diversification in the state’s economy and carry out an integrated approach to increase actual independent revenue by 50%.

THE expected total statutory allocation of N45. 5492 billion, independent revenue of N25 billion Value Added Tax (VAT) of N12.0195billion, Roll Over Fund of N8.5595 billion, Mineral Derivation of N17.6716 billion, Tax Refund of N9.600 billion and credit from Development Partners of N16.32810 billion are pointers that government’s large chunk of revenue are tied to the mercy of the federal government, and if all these monies are not available, it may greatly affect the state budget.

HOWEVER, we see opportunities. For example, the state government’s decision to approach the capital market for a new N30 billion bond to fund the huge infrastructural needs in the state is a welcome and ambitious move. This, to us, will assist the state to execute some of its lofty programmes and bring development.

THE expenditure of N87.906 billion in favour of capital development is commendable. The lofty idea has shown the assiduous resolve of the government to fast track the completion of all the ongoing capital projects in the state.

ON the education sector, it is a good idea for the state government to budget the sum of N34.841 billion, the third largest after infrastructural development. This amount will tackle the infrastructural decay in the sector and bring back the state to its viable education position.

HOWEVER, the N190.023 billion proposal for this year gives cause for anxiety. The average of oil price assumption of $55 per barrel looks good, however, the zig zag nature of the dollar in the international market is giving people goose pimples. More troubling is the assumed 1.60million barrel per day oil production target in the budget. The recent vandalism of oil pipelines in some states and threat by some militants to attack oil installations could make government to struggle to meet its target. The recent blow up of Conoil facility by militants is an attestation to the fact that the issue if not promptly addressed may affect the 2019 budget.

AGAIN, since the revenue projections are based on some macro economic assumptions as contained in the 2019-2021 MTEF of both Ondo State and Federal Governments, success will depend on the state government improving on the average monthly IGR, blocking loopholes in revenue and wastages and faithfully implementing the capital expenditure and debt repayment principle.



ANOTHER clog to the good implementation of the budget is that the present exchange rate of N305 to1 US$ depends on how stable the naira is to a dollar, how stable the oil prices are and successes in diversifying external revenues.

TO realise its objectives, Ondo State Government must intensify efforts at blocking its revenue leakages to increase revenue base. It is gladdening to note that the IGR of the state has increased from N905 million in 2017 to N1.263 billion in 2018. Government needs to tidy up the Board of Internal Revenue and make it autonomous so it can carry out various on-going financial reforms.

THE N10.369 billion budgeted for debt servicing is on the high side; we are suggesting that the state government should look for a more prudent way to raise revenues in this area. Again, things that should attract investors and increase the revenue base of the state should be embarked upon by government.

THE HOPE is of the opinion that the government should accord the Ore-Intersection flyover/bridge,Okitipupa/Igbokoda By-pass road, Araromi Seaside/Lekki road and other ongoing road constructions in the state top priority to attract investment and generate more revenues to the state. There is the need to give the road projects the urgency they deserve as vital economic recovery projects, until the state returns to its lofty position in the comity of states in Nigeria.

WE also need to work harder to raise funding for health sector in the state. The N6.3 billion budgeted for capital expenditure in this critical sector is not enough to tame the medical brain drain in the sector; government must do more in financing the health sector to attract the best experts to hospitals and the proposed University Teaching Hospital .

IMPLEMENTATION has been the bane of budgets in the country. Ondo government needs to overcome this. We observe that no budget has been fully implemented in the country since 1999, while government borrowed to meet expectations of the people.

EFFORTS should be made by the government to execute all the ongoing capital projects. We however appeal to the State House of Assembly to look at the budget critically and pass it into law without a delay. The elections into various offices which are slated for February and March should not be an hindrance to the early passage of the budget.

SOURCE: http://ondostate.gov.ng/Home/NewsItem/Ondo-Budget-Of-Rapid-Progress