This is the second time in just about a year that we have had to review the Oyo State Government’s budget downwards. The reason for this latest revision is apparent to all. The economic meltdown we are experiencing occasioned by the crash in oil prices coupled with the COVID-19 pandemic has greatly affected our state’s ability to stick with the original budget. So, after the review, which we submitted to the Oyo State House of Assembly, it was agreed that we should effect an 18.3% downward review of the budget, from N213 Billion to N174 Billion. It is this revised budget that I am signing today.
As I sign this revised budget, it is a good time to reflect on one issue that has plagued our budget implementation over the years—the issue of poor budget performance. We make robust presentations of plans that mostly end on paper because the funds are not available to implement them. When you have an annual budget performance of about 30%, you will understand why we keep having stagnation in economic growth. Or how else will you explain an IGR average of about N1.8 billion in the past four years?
Oyo State is viewed as a civil service state because we have not taken the needed action to boost the economy. So, we have taken some steps to ensure that the 2020 revised budget is adequately funded. As I said at the signing of the initial budget, we are aiming for a minimum of 70% performance.
One of the steps we have taken is to ensure that any loans taken are used to fund priority capital projects. This revised budget includes N65.2 Billion for capital projects while N108.9 Billion is for recurrent expenditure. We plan to pay a huge chunk of our recurrent expenditure through our allocations from the federation account and our internally generated revenue. Therefore, another thing we are doing is using an Alternative Project Funding Approach to carry out key priority projects. This will be used for the the twenty-one-kilometres Airport – Ajia – New Ife Express Road with a spur to Amuloko in Ibadan.
What the alternative approach entails is that the contractor will fund the project and the Oyo State Government will pay for the project over thirty months. I have seen some comments about the cost of the Airport Road. There is no basis for the comparison between the Airport Road and the Moniya-Iseyin road. Unlike the Moniya-Iseyin road, the Airport road will contain hydraulic structures.
Let me use this opportunity to talk about the N100 Billion bond, also known as the Oyo Prosperity Bond, which was recently proposed and approved by the Oyo State Executive Council. There is no arguing that floating this bond is an ambitious move. But I want to believe that we were voted into office to take bold steps in developing our economy. The facts before us are clear. Our state has huge infrastructural deficits. If those deficits are not addressed, it means we will be maintaining the status quo. Any person with sound financial knowledge will tell you that the only way to get out of this cycle of poverty is through massive investment in infrastructure.
As I have always said, the problem with loans is not in taking them, but in the way loans are utilised. Oyo State cannot get out of its infrastructural deficit without taking loans targeted at developing key infrastructure. For example, we are targeting economically strategic roads such as the fifty-kilometres Iseyin-Ogbomoso road and the Ibadan Circular Road. We are also giving attention to the health sector by either constructing or upgrading one public hospital in each of the three senatorial districts of the state. In the transport sector, we are focused on building the Ibadan Dry Port and rail corridor and upgrading the Ibadan Airport. Oyo State cannot attract investments into our economy without showing that we are worthy of these investments. Investors will go to Lagos and even our neighbouring Ogun State if we continue running our economy with the same level of unseriousness that the state has come to be known for. Tell me, what excuse do we have for not making it into the list of top ten economies in Nigeria? How can we, despite being in these dire conditions, not recognize the urgency of growing our economy?
I took an oath to lift Oyo State from poverty to prosperity using our Roadmap to Accelerated Development of Oyo State 2019-2023. I am determined to keep my word. Every step we have taken as an administration since our being sworn in on May 29, 2019 till date is geared towards ensuring that every promise made will translate to promises kept. I pledge to continue carrying you along as we make the best decisions for the overall good of the people of Oyo State.
Let me conclude by thanking the Oyo State House of Assembly for reviewing the revised budget proposal in a timely manner and for approving the downward review. It is heartening that the three arms of government have continued to work harmoniously for the good of the people of Oyo State
~Governor Seyi Makinde, July 29, 2020.