The Oyo State Government has described the news of the alleged padding of the 2021 budget, passed by the House of Assembly last week, as untenable saying there was no evidence to substantiate it.
The downward review of the N273.7billion budget to N268.8billion, the state government said, became imperative due to the need to sustain the budget.
According to the state government, contrary to the insinuation by a section of the media that the budget was rejected by the Executive based on the fact that the House of Assembly padded it to the tune of N7.1billion, its revision to N268.8billion was aimed at enhancing overall budget performance.
The Commissioner for Budget and Economic Planning, Adeniyi Farinto, stated on Friday in Ibadan that the Executive arm of government only requested the House to consider a downward review of the N273.7billion budget based on the critical ratios required for sustainability.
“There was never a time the government rejected the budget based on the addition of the N7.1billion. The Executive only called the attention of the legislative arm of government to the need to achieve fiscal sustainability of the proposed 2021 appropriation bill.
“The House was notified by the Ministry of Budget and Economic Planning to consider revising the budget based on a set of critical ratios required for the 2021 Appropriation Bill to be sustainable.
“These ratios include capital expenditure as percentage of non-debt revenue; recurrent expenditure as percentage of non-debt revenue; capital expenditure as percentage of total revenue; and the recurrent expenditure as percentage of total revenue. These indices were used as the benchmark for the fiscal sustainability of the 2021 budget.
“The final budget was revised downward based on these indicators from the N273.7 billion earlier passed to N268 billion.
“While the House saw the need for upward review of the budget to accommodate more developmental projects for the state, the need to ensure adequate budget performance in the presence of the current pandemic-induced recession also contributed to the necessity to give further consideration to the budget.
“The current macro-economic fundamentals at the national level (Inflation Rate at 14.89 per cent; Exchange Rate (USD) to ₦379; Monetary Policy Rate at 11.5 per cent; Crude Oil Price in at $51.1) required that the budget should be revised downward to achieve a realistic outlook in the year 2021.
“In addition, the pervading economic uncertainty due to the second wave of the pandemic has justified the need to tread more cautiously towards revenue and expenditure projections for the year 2021. The Executive arm is currently making substantial effort to avoid a loan-driven budget that will further increase the level of fiscal deficit of Oyo State in the year 2021 through the adoption of strategies that will increase the revenue base of the state’s economy.”
