…Proposes reduction of the budget by 13.67%
Confronted with the reality of the current economic downturn brought about by the adverse effect of the coronavirus pandemic on the economy, the Enugu State government, Tuesday, held a “citizen’s engagement on the 2020 revised budget” through the Ministry of Budget and Planning.
This was further occasioned by the mandate from the Federal government to the 36 states of the federation to restructure their budgets in order to reflect the adopted templates by the National Executive Council, NEC.
Worthy of note is the fact that the Office of the Governor is the worst hit in the readjustment as the budget of the office was reduced by 34.71%.
After the revision, the recurrent expenditure increased from N68,790,000,000.00 to N69,790,000,000.00 representing 1.45% and this could be attributed to the fact that the state has implemented the new minimum wage in the country.
The Capital expenditure was reduced from N100,767,658,300.00 to N76,584,641,080.00 representing -24%.
However, the capital expenditure still leads with 52% while the recurrent expenditure accounts for 48% of the budget.
In his presentation at the Dome Event Centre, New Haven, Enugu, Governor Ifeanyi Ugwuanyi, said the budget revision became imperative due to “the economic impacts of the COVID-19 outbreak, especially the drastic reduction in government earnings, arising from the sudden collapse of the global demand for price of crude oil”.
Represented by his deputy, Mrs. Cecilia Ezeilo, the governor noted that the public session with citizens of the state underscores the state government’s commitment to participatory democracy and transparency. The Deputy Governor added that the exercise was also “in fulfillment of our obligations under the Fiscal Responsibility Act 2007 and the conditions of the World Bank budget policy support partnership as well as our Open Government Partnership (OGP) obligations.
She maintained that “the budget of the Enugu State Government is the business of all the stakeholders and opinion leaders as well as all Ndi Enugu at home and in the Diaspora”, stressing that their brilliant and patriotic inputs and their faithfulness “made our 2019 budget to achieve a performance of 80%”.
She said this was in addition to Enugu’s current enviable rating as one of the six most economically viable states in Nigeria.
The Hon. Commissioner for Budget and Planning, Dr. David Ugwunta, in his presentation, stated that the state government proposes a reduction in the budget size from N169,557,658,300.00, to N146,374,641,080.00 signifying a 13.67 percent (N23,183,017,220.00) reduction in the 2020 budget size. The savings and additional sum required are N53,617,927,900 and N27,455,910,680.00 respectively.
Ugwunta explained that the outbreak of COVID-19 pandemic had its negative consequences that resulted in the drop of GDP growth, which brought about increase in inflation, thus the need for the adjustment to reflect the current economic realities.
Dr. Ugwunta pointed out that “irrespective of this reduction, we still maintained a higher ratio of capital expenditure which is where the base of the economy will come from.
While seeking the cooperation and inputs of state residents, Dr. Ugwunta assured them that the revised budget, if approved, will guarantee the state government’s firm footing to address their development needs and better placed to respond to the challenges associated with COVID-19 pandemic.
“The revised budget is structured in such a way that the state can continue to pay the new minimum wage unhindered, allowances including health hazard allowances to our front line healthcare workers for them to be able to continue in the fight against COVID-19.
“We expect that this revised budget will continue to finance the huge investment of the state in health infrastructures and facilities.
He added that the state government was revising the 2020 budget to make it COVID-19 compliant and in such a way to retain government’s investment in works and infrastructure such as the construction of Enugu Diagnostic and Infectious Disease Centre, general hospitals across the 3 senatorial zones, isolation centres, ultra-modern health centres as well as investment in agriculture especially, the Efi Igbo, SMEs, etc.
Also speaking at the stakeholders forum, the Permanent Secretary, Ministry of Budget and Planning, Mr. Ugwu Casmir, stated that what informed the decision to revise the state budget was because “it is no more as it used to be because the economy has nosedived since the COVID-19 and because of it, everything we proposed by November last year when we drafted the budget, has almost being eaten up by COVID-19.
He explained that the outbreak of COVID-19 pandemic had its negative consequences that resulted in the drop of GDP growth, which brought about
increase in inflation.
Dignitaries at the event included the Deputy Speaker of the State House of Assembly, Rt. Hon. Uche Ugwu and other members of the State Assembly, Secretary to the State Government, Prof. Simon Uchenna Ortuanya and other members of the State Executive Council, state traditional rulers led by their Chairman, HRH Igwe Lawrence Agubuzu, Permanent Secretaries of various ministries, members of the Civil Society Organizations (CSOs), President General of various Town Unions amongst others.
It will be recalled that the state government had carried out similar exercise during the preparation of the 2020 budget, which offered citizens the opportunity to make their inputs in the preparation of the budget.
