GOVERNOR Ben Ayade of Cross River State has presented a budget of N1.1trn ($3bn) to the state house of assembly for the 2020 fiscal year that historically involves 82.8% of all spending going on capital expenditure.
In August, President Muhammadu Buhari presented his 2020 budget, which totalled N10.33trn ($28.4bn) and ever since governors have been following suit. This morning, Governor Ayade, presented what he tagged a Budget of Olimpotic Meristemasis, with a capital expenditure of N911bn representing 82.8% and a recurrent expenditure of N188bn, representing 17.2%.
Traditionally, Nigerian budgets have been 70% recurrent and 30% capital, limiting the amounts made available for investment in infrastructure. However, Governor Ayade has broken away from this tradition for the first time ever, making spending on infrastructural and income-generating ventures central.
While explaining that meristemasis is the active cell that stimulates growth in a young plant, which in this case represented the state, the governor pointed out that, the budget will catalyse into existence a great opportunity for the state to put all hands and legs on the pedal. He added that the decision to set aside 82.8% of the budget for capital expenditure, was indicative of his government’s commitment that will continue to reduce recurrent expenditure and focus on capital expenditure.
On the sectoral breakdown, Governor Ayade disclosed that the health sector has an allocation of N44bn, education N38bn, new city development N35bn while agriculture was allocated N22bn and social housing N12bn. He announced that his administration would sustain its current tax policy with adjustment under the new budget.
Governor Ayade said: “All low income people like civil servants earning below N100,000 will be exempted from tax. Small scale businesses like barbing saloon, hair dressing and others are hereby exempted from taxation.
“We must come to the understanding that indeed any state whose budget is driven by envelope size is limited in vision. There are two ways in business and public sector management that you place your budget, as it is either that your budget comes as an expression of your envelope size or as an expression of your ambition.
In addition, the governor also abolished the current daily levy of between N500 and N1000 by taxis in the state, noting that they will now only pay N2000 only every month. He added that the prosperity agenda set for this state does not allow him the opportunity of envelope budgeting.