Ogun State budget up by 61%, capital expenditure hits N110bn
On January 30, 2012
By NKIRUKA NNOROM
The Ogun State Government is to spend 55 per cent of its budget in 2012 on capital projects. This represents an 18 per cent increase in the allocation for the previous year. The state Commissioner for Budget and Planning, Mrs. Oluwande Muoyo gave the breakdown during a breakdown session on the budget to major stakeholders in the state capital, Abeokuta.
For the 2012 fiscal year, the state government will spend N200 billion. Out of this, N110 billion will go to capital projects while N90 billion is for recurrent expenditure. The commissioner explained that the increase in the allocation for capital projects was to allow for massive infrastructure development which is one of the five cardinal programmes of the Amosun administration.
“The CAPEX/Recurrent Ratio for 2012 is 55:45 as against 37:63 in 2011. This is to pursue our objective of aggressively rebuilding Ogun State through priority for investment spending,” she said. While 33 per cent of the budget will be funded from internal sources, 67 per cent will be funded from projected inflow from the Federation Account (35 per cent) and Capital Receipts (32 per cent).
A further breakdown of the budget shows that 67 per cent of the budget will be spent on the administration’s 5 cardinal programmes (Education, Rural & Infrastructure Development /Employment Generation, Housing & Urban Renewal, Healthcare and Agriculture/Industrialisation.) Education takes the lion share of N42.4b, representing 20 per cent of the entire budget, while Housing and Community Amenities will gulp N29.1b.
The commissioner noted that the state government intends to pursue an aggressive internally generated revenue (IGR)formula for 2012, with an expected IGR of over N100b. This, the government expects to achieve by widening its tax net, especially the residency rule, improve collection mechanism and block leakages in the system.
Mrs. Oluwande Muoyo, explained that the sum of N66.25 billion representing 33 per cent of the budget size would be sourced internally; another N60.30 billion representing 30 per cent of the budget would come from Statutory Allocation, while Value Added Tax would account for N10.50 billion, representing five per cent of the total budget. The remaining N63.50 billion, representing 32 per cent of the total budget would be generated from capital receipts.
According to her, “The Capital Expenditure /Recurrent Ratio for 2012 is 55:45 as against 37:63 in 2011. This is to pursue our objective of aggressively rebuilding Ogun State through priority for investment spending.”
She further noted that in 2012, “it is envisaged that the IGR will increase by about 104 per cent over the budgeted figure in 2011,” while explaining that the state would achieve that through widening of its tax net, improved collection mechanism and blockage of leakages.
According to her, “The chunk of the budget would be dedicated to Capital expenditure which is expected to gulp about N110 billion, representing 55 per cent of the total budget. About N46.53 billion or 23.21 per cent of the total figure would be allocated to salaries and allowances; overhead cost would take about N23.54 billion, representing 11.73 per cent, while the balance of N20.47 billion or 10.21 per cent would be spent on Consolidated Revenue Fund and public debt charges.”
A breakdown of the budget shows that personnel cost would be 14 per cent higher than the budgeted figure in 2011; overhead cost was 45 per cent increase over approved figure in 2011, while recurrent expenditure was 15 per cent increase over N78.8 billion approved in 2011.
Sectoral allocation shows that the largest amount would be spent on economic affairs (N46.11 billion); education occupies second place with N42.43 billion allocated to it, while general public service had N37.30 billion. The next was housing and community amenities which had N29.12 billion allocated to it, followed by healthcare with N15.61 billion and social protection that had N9.80 billion allocated to it.
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