13 December 2009
THE Rivers State's 2009 revenue projection stands at a total of N432,280,000,000. Out of this sum N24,250,000,000 was expected to accrue to the state as statutory allocation from the federation account, while N123,430,000,000 as its share of the 13percent derivation also from the federation account which accounts for 67 percent of the projected revenue.

Out the projected revenue, the state expected N73,600,000,000 to accrue to it from the excess crude from the federation account, and another N8,000,000,000 from value added tax, while the sum of N99,000,000,000 was expected as internally generated revenue.

In addition to this, is N104,000,000,000 being unspent funds from the 2008 budget.

Owing to the fact that, 67 percent of the 2009 revenue was expected to come from the federation account, which itself is dependent on the flow of oil revenue, the drastic drop in oil production due mainly to militancy and a fall in the price of oil in the international market, have adversely impacted revenue projection and the state's development programmes.

The Niger Delta Citizens and Budget Platform (NDCBP), which initiated a budget advocacy campaign aimed at citizens' education, mobilization and participation, said the state's 2009 budget represents a rare break with a tradition of volatility and wastage.

The group's coordinator, Mr. Ken Henshaw said,"while in 2007 and 2008, only N22,464,098,500 of the revenue projection was expected to be from internally generated revenue, the 2009 budget provides for N99,000,000,000 or 30percent of IGR. Though such radical projection also comes with the challenge of ability to actually collect such revenue, it nonetheless indicates an understanding of the need to reduce the state's dependence on oil related revenue."

In this year's outgoing budget, the government was expected to spend a total of N88,060,059,331 or 20.3 percent of the total budget on recurrent expenditure, while N344,219,940,669 or 79.6 percent is to be spent on capital expenditure.

The total budget figure also shows a N75,984 per capital share. In simple terms, this figure represents the amount the government intends to spend on each of its citizens in 2009. According to NDCBP, the budget presents very poor distinction of sectors and the attendant allocations.

Henshaw observed that budget lines that obviously belonged to certain specific sectors are treated as independent. For example, Ministry of Works, according to him, is treated differently from the state Water Board and Rural Water Supply. Also, Roads and Drainage are treated as distinct from Sewage and Drainage.

He further argued that many similar ambiguities make it difficult to make proper sectoral distinction.

He pointed out that a look at the spending priorities of the administration raises questions as to what the subjects actually refer to. For instance, he noted that the government intends to spend N8 billion as 'security vote' under the 'government house'. In 2008, N12 billion was dedicated for the same purpose.

"The proper designation of 'security vote' has been a source of many interpretations and equally many conflicts. But whatever the contention is, the fact remains that the presence of a subject in the budget whose exact use is permitted to remain secret and the funds allowed to go unaccounted for, is a misnomer and an avenue for the drain of scarce resources," said NDCBP.

Other expenditure preferences which the NDCBP raises questions on include, 'General Administration (Proper)' which is allocated N18,753,828,700. Whereas, in 2008, the same subject was allocated N35,223,307,747. Based on the budget, the funds are to be shared among the various government ministries and agencies as well as an array of special advisers. The budget, however, is silent on the exact nature of 'general administration' these funds will be used for, since most of their capital expenditure are already catered for under other subjects in the budget, and they are also provided for in the recurrent expenditure list.

The budget did provides N1,050,000,000 for Rivers State House of Assembly Capital Expenditure. In 2008, N3,153,319,904 was allocated for the same purpose. No indication of the actual expenditure plan for the funds is provided in the budget. This fact raises questions as to the manner of capital expenditure that Rivers State legislators are expected to make.

NDCBP observed that in the same manner of allocation, N2,000,000,000 was given to the subject 'Special Project Bureau (Specified/Unspecified Projects)', and N2,300,000,000 is marked for 'Unspecified Projects (Government House)'.

In this year's budget, a total of N48, 179,775,664 was allocated to the education sector compared to N23, 799,597,874 in 2008. The reason for this astronomical increase is propelled by government's desire to renovate dilapidated public primary and secondary as well as construction of new ones, which indeed, is noticeable in the state.

But, when calculated against the overall state budget, the education sector only gets 10 percent of the total budget. Henshaw pointed out that while the increase of almost 100 percent if maintained and replicated in other fiscal years and properly utilized could transform education in the state, "it is difficult to see how the 2009 allocation of 10 percent of the overall budget can lead to the achievement of the administration's policy objectives in the area of education in the long term."

Similarly, the budget allocates N19, 055,000,000 to the health sector. The 2008 allocation was N14,489,250,000. The 2009 allocation represents a N4,565,750,000 nominal rise. When inflation is factored in at 14 percent, the figure stands at N16, 714,912,281.

NDCBP observed that just as in the education sector, the figures indicate a fresh lease of commitment to the health sector. This rise in allocation is responsible for the speedy renovation and construction of 105 health centres across the state.

Henshaw argued that the value of the allocation, however, become less heartening when it is calculated against the backdrop of the overall budget sum. According to him, the allocation represents just 4percent share of the entire budget.

According to him," It becomes even more so when it is recalled that subjects such as 'security vote' and 'general administration' receive N26,753,828,700 or 6 percent of the total budget. Clearly, the above scenario does not indicate a commitment to the government's vision of providing 'basic social amenities' for its citizens.

While the increase in allocation is indicative of new policy interest on the part of the government, it is important to maintain the trend of increased allocation to the sector. "

Efforts by The Guardian to get a detailed account of sectoral allocations from the state Commissioner for Finance and his Budget and Economic Planning counterpart, to primarily ascertain how much has accrued to the state and if the budget has been successfully implemented proved abortive.

The Rivers State government recently posted a summary of its 2009 Budget on the state's website. While the few pages made public gave insight into the overall spending priorities of the government according to sectors, as well as the size and contribution of various revenue sources, it failed to provide any detail into actual projects that the various sectoral allocations will be spent on.

When contacted on phone, the Commissioner for Budget, Gogo Levi Charles, said he could not divulge of any information on phone since he did not have the figures off hand, and when pressed for an interview, he alleged he was travelling out of the state.

Henshaw said, "The relevant offices in the Rivers State government still consider the budget a private document, perhaps the exclusive preserve of a few within the corridors of power. At every request for the budget, the ready response was always another request to know what the budget was needed for. Ostensibly, no answers are considered satisfactory enough to necessitate the release of the budget to 'the public."

Rivers State is ranked as the second largest economy in Nigeria, preceded only by Lagos State. It is the Hydro Carbon capital of Nigeria, providing the main hub of activities in the oil sector. Benefiting from the 13 percent principle of derivation, which requires the allocation of a 13percent share of oil revenue to the state of their extraction, Rivers State emerges among the highest earners of revenue in Nigeria.

The 2009 figure of N432,280,000,000, according to NDCBP ought to translate to an increased capacity of the state to carry out development programmes. These facts notwithstanding, Rivers fares very poorly in all development indicators, even in comparison to other less affluent states in the country.

According to Henshaw, It is perhaps as a result of the attendant backwardness that this situation has engendered, that the current administration has adopted a far reaching approach embodied in the Rivers State Sustainable Development Programme, itself conceived as a partnership between the public and private sectors, including international financial institutions.

By Kelvin Ebiri

http://www.ngrguardiannews.com/sunday_magazine/article03/131209