2011 Budget Dialogue

Click to edit
Analysis
of Kano
Master
State
subtitle
Government
style
Budget

3/26/12

Budget Forum

11

Part 1: over-view of Budget 2011

2011 Budget of Continuity and part

of Kano State Road Map for
Development (KSRD)

3/26/12

Budget Forum

22

Over-View (Contd.)
2010

2011

110. 69Billion

109.47Billion
Approx 1% less

3/26/12

Budget Forum

33

Over-view contd.

Composition:

Recurrent expenditure N50.955

billion (46.5%)
[personnel cost: 27.4b(53.7%). Overheads 20.35b (39.9%) and

CRC 3.2b (6.

Capital expenditure
billion (53.5%)

3/26/12

Budget Forum

N58.52
44

Over-view contd.
sector

Capital allocation

Land and Physical planning

19.3%

Works and Housing

17.9%

Budget and Planning

11.7%

Education

11.3%

Agriculture and Natural Resources

10.9%

Rural and Community Development 7.7%

Health

6.1%

Environment and Sanitation

3.5%

Water Resources

3.0%

Higher Education

2.0%

3/26/12

Budget Forum

55

Over view contd.

Education responsible for:

18% of overhead costs

44.5% of state-wide personnel costs

Health Sector accounts for:

3.6% of overheads

25.6% of personnel costs

Water resources: 5% of overheads

3/26/12

Budget Forum

66

Over-view contd.

Budget Finance

Recurrent revenue : N84.59b of

which IGR is N17b or 20.5%. Is this
feasible?
Capital receipts :
which:

N24.9b of

grants N9.3b

loans N1.4b (domestic or

foreign ?) Budget Forum
3/26/12
77

Over view contd.

is 2011 budget different? Is it

traditional

3/26/12

Budget Forum

88

General features of State Budgets

1. Sources of Finance: IGR Vs

Federation Accounts.
2. Composition of Budgets:
Recurrent Vs Capital Costs

3. Budget Performance

4. Budget Impact
3/26/12

Budget Forum

99

The issue: closing the

budget gaps

Internal Resource Generation

External Resource Generation

Resource Utilization
3/26/12

Budget Forum

1010

Total Revenue..
Federation Account

I.

Stat Allocation

VAT

Excess crude- now Sovereign Wealth

Fund

II.

IGR

III.

Other

3/26/12

Budget Forum

1111

IGR: today
Revenue

N billion

Remarks

Consolidated

57.55

51.99% of revised estimates

49.84
7.71

IGR is 13.4%
revenue.

a.
b.

Federation account
IGR

3/26/12

Budget Forum

1212

of

consolidated

Government Revenues: recent past

Year

2003

2004

2005

2006

2007

2008

2009*

Internally
3.079
Generated
Revenue
(N
Billion)
Total Revenue (N22.782
Billion)

4.418

4.727

7.778

6.091

8.300

5.730

31.817

37.910

47.865

39.615

70.720

43.696

IGR rate ofchange %

43.5%

6.99%

64.54%

-17.23%

36.27%

-31.00%

IGR as % Total13.5%
Revenue

13.9%

12.6%

16.25%

15.38%

11.70%

13.00%

3/26/12

Budget Forum

1313

Recent past:
Total Revenues: (2003-2009) N294.4
billion of which:

IGR = N40.123 billion (14%) and

FA = N254.277 billion (86%)

(Compare: Lagos-63%, Sokoto-47%,

Ogun-28% and Ondo 16%. National
average in 2008 approx 15%)
3/26/12

Budget Forum

1414

IGR: 1990s
Year

1995

1996

1997

1998

Total
revenues1.6
(Naira Billion)
IGR
0.205

2.2

2.8

3.2

4.7

0.457

0.352

0.599

0.603

IGR as % of TR

17%

13%

19%

13%

3/26/12

1994

13%

Budget Forum

1515

Government Revenues Contd.

3/26/12

Budget Forum

1616

Whats common?

IGR small and erratic

13% of RR today

11-16% 2003-2009

13-19% 1994-1998

Meaning: Nothing has changed?

3/26/12

Budget Forum

1717

Government Revenues contd.

3/26/12

Budget Forum

1818

personnel and overhead

costs:2003-2009
Year

2003

2004

2005

2006

2007

2008

2009*

IGR

3.079

4.418

4.727

7.778

6.091

8.300

5.730

6.534

9.191

9.550

11.593

13.113

7.305

12.084

17.654

13.079

13.523

13.839

21.275

27.203

24.672

34.76

26.636

67.6%

51.4%

81.4%

52.5%

46.7%

60.5%

39.1%

44.1%

46.6%

42.4%

31.9%

22.2%

28.6%

24.7%

23.88%

21.5%

Personnel
6.164
Cost
Overhead
7.088
Costs
Recurrent
13.252
Costs
IGR/Personn 49.9%
el
IGR/Overhea 43.4%
ds
IGR/Recurre 23.2%
nt

3/26/12

Budget Forum

1919

IGR, Personnel and

Overhead costs

3/26/12

Budget Forum

2020

IGR and Costs

2009: IGR =N5.7b, Personnel Cost
N13b and Overheads (fuelling
vehicles, meals and refreshments
etc) N13.5B

2003-2007:

58.25% of personnel costs OR

46% of overhead costs OR

25% of Recurrent expenditure of the

State.
3/26/12
Budget Forum
2121

Four issues on IGR

I.

II.

The KSBIR: collects 51% of IGR,

employs 542 people, pays approx
N300 m and now made idle by
The Revenue Contractors:
agreement not transparent,
collection costly, operation has no
lasting impact on service delivery
and does not alter revenue profile.

The KN public and tax-payment:

3/26/12
Budget Forum
2222 6%
rate of voluntary
compliance:

III.

What to do:
I.

II.

III.

BIR: build capacity, professionalize

& mechanize, build integrity
Revenue Law 2010: implement to
make BIR autonomous
Public: inform, dialogue-to improve
voluntary compliance

Govt. : rebuild social/fiscal contract,

enforce taxBudget
laws
and impose
3/26/12
Forum
2323

I.

Challenge 2: reducing
wasteful spending

3/26/12

Budget Forum

2424

Composition of budgets
Item/year

2003

2004

2005

2006

2007

2008

2009*

Total

Total Budget ( 18.795

Billion)

19.404

36.528

44.632

41.126

86.7

44.437

291.62

Recurrent

13.252

13.839

21.275

27.204

24.672

34.8

26.637

161.68

%of Total

71%

71%

58%

61%

60%

40%

60%

55.44%

Capital

5.543

5.565

15.253

17.428

16.454

51.9

17.801

129.94

%Total

29%

29%

42%

39%

40%

60%

40%

44.56%

3/26/12

Budget Forum

2525

Composition contd.

3/26/12

Budget Forum

2626

Composition of budgets contd.

3/26/12

Budget Forum

2727

Composition contd.

except
for
2008,
Recurrent
Expenditure constitutes 58%-71% of
State Budgets.
therefore 29-42% of the budget is
available for capital investment to
build schools, hospitals, roads, dams
etc.
This means for EVERY Naira 71K is
operational cost and 29k capital
3/26/12
2828
investment.Budget Forum

Composition contd.

to
illustrate:
2003-2007
total
spending was N160 billion of which:-

N58 billion (36%) overheads

N10 billion (6%) administration

N41 billion (26%)-personnel

N109 billion or 69% of budgets

N50 billion (31%) capital investment

3/26/12

Budget Forum

2929

Composition contd.

A worrisome development:
five government units Cabinet
Office, Office of Governor, Office of
HOS, SHoA are responsible for
between 25% and 38% of state-wide
recurrent costs.
The 5 units recurrent costs of N9.8
billion (2009) exceed the capital
investment spending of 7 MDAs,
3/26/12
Budget Forum
3030
namely:

Composition contd.

water resources (N1.89 billion),

education (N471 million), higher education (N86
million)

agriculture (N1.82 billion),

health (N1.29 billion),

rural and community development (N557 million)

and works and housing (N1.99 billion).

Similarly, the capital spending of education (N471

million) and higher education (N86 million) was far
below the recurrent costs for running the Governors
office (N1.221 billion) or the State House of
3/26/12
Budget
Forum
3131
Assembly (N1.256
billion)
in 2009

Broadening the resource

base

The capital market (for capital

intensive, revenue yielding projects:
Kano line, KASCO, Meat and
Associated Products, Kano Ginnery,
Daula Hotel, Markets)

Development finance institutions

PPP
3/26/12

Budget Forum

3232

Kano Line: N50m Credit Facility in

1992 to boosts fleet of vehicles
Metro LGs: N50m to rebuild Sabon
Gari, Rimi Markets.
Kaduna 2009: $21 m to build science
schools
Many other States.
3/26/12

Budget Forum

3333

Composition contd.

Will the 2011 budget be different?

IT MUST BE!

3/26/12

Budget Forum

3434

Budget Performance

Are Budgets Implemented as

Intended?

3/26/12

Budget Forum

3535

Performance

Estimates:

N457.611 billion

Actual

N286.365 billion

Variance :

(N171.25 billion)

Budget Performance Index

(overall) 62.6%
Score: Very Good!

3/26/12

Budget Forum

3636

Performance contd.

However consider 2010 budget

3/26/12

Budget Forum

3737

Performance contd.
actual

revised

Index

Capital
expenditure

13.69 b

56.2

25%

Recurrent
expenditure

33.32 b

52.70

63%

All budget

47.01b

108.88

43%

Performance
Index

3/26/12

Budget Forum

3838

Part 3: Focus on Education and

Health

Should we prioritize?

3/26/12

Budget Forum

3939

Challenges..education
Primary + pre-primary

JSS

SSS

No of schools

5,024

847

347

No. of class rooms

22,924

4,746

3,203

Number usable

21,640 (94.4%)

4,499 (94.8%)

3,068 (95.8%)

-in need of major repair

18.3% (range:4.8-35%)

13.3% (0-27%)

19.7% (0-89%)

-with sufficient seating

35.5% (14-95%)

45.3% (23.5-100%)

52.5% (0-100%)

-with good blackboard

61.5% (37-95%)

73.9% (45.2-100%)

73.6% (25-100%)

Schools with no water

47.4%

25.9%

14.2%

Schools with no toilet

61.8%

32.1%

13.5%

Pupil-toilet ratio

200.6

85.6

68.5

Pupil-class room ratio

87

59

55

-range

49-246 (BGW-KNC)

27-126 KNC-KBT

22-132 (DGW-DALA)

3/26/12

Budget Forum

4040

Challenges..contd.
Primary

JSS

SSS

PRE-PRIMARY

All teachers

44,648

7,903

5,380

584

qualified

16,531 (37%)

6,239 (78.9%)

4,396 (82%)

207 (35.5%)

-all teachers

42 (21-102)

33 (13-67)

31 (14-53)

251 (40-3,594)

-qualified

114 (58-570)

42 (16-74)

39 (18-73)

710 (75-6,148)

Pupils

1,054,994

264,143

169,725

975,375

Pupil-teacher ratio

3/26/12

Budget Forum

4141

Budget Estimates (2003-2010)

Year

2003

2004

2005

2006

2007

2008

2009

2010

Total Budget 34.76

(Billion N)

35.81

47.54

55.60

57.77

105.21

120.92

110.69

Education
(Billion N)*

4.06

3.25

8.18

10.22

14.04

23.73

24.37

11.3%

6.8%

14.7%

17.7%

13.3%

19.6%

22.0%

4.28

Share in total 12.3%

budget

3/26/12

Budget Forum

4242

Budget estimates and

education expenditure
2003-2010

3/26/12

Budget Forum

4343

Education expenditure as %
of total estimates 20032010

3/26/12

Budget Forum

4444

Education: share in actual spending

(2003-2009)
Year

2003

2004

2005

2006

2007

2008

2009

total

Total Budget 14.48

(Billion N)

18.55

36.53

44.63

41.12

86.62

44.44

286.4

Education
(Billion N)*

1.80

2.55

6.20

7.38

11.86

8.05

39.8

9.69%

7.0%

13.9%

17.9%

13.7%

18.1%

14%

1.96

Share in total 13.5%

budget

3/26/12

Budget Forum

4545

Education: share in actual expenditure

(2003-2009)

3/26/12

Budget Forum

4646

Share in actual budget

3/26/12

Budget Forum

4747

What is the budget spent on?

3/26/12

Budget Forum

4848

Has the budget been faithfully

implemented?

3/26/12

Budget Forum

4949

Budget implementation

3/26/12

Budget Forum

5050

Where are implementation gaps?

2003

2004

2005

2006

2007

2008

2009

4.28

4.06

3.25

8.28

10.22

14.04

23.73

Actual (Billion 1.96

N)*

1.80

2.55

6.20

7.38

11.86

8.05

Variance
(Billion N)

2.32

2.26

0.70

2.08

2.84

2.18

15.68

Index %

45.79%

44.33%

78.46%

74.88%

72.21%

84.47%

33.9%

estimates
(Billion N)

3/26/12

Budget Forum

5151

Performance Index

Education Index %
12
10
8
6
4
2
0
0

3/26/12

Budget Forum

10

12

5252

Performance of capital budget

Year

2003

2004

2005

2006

2007

2008

2009

Estimates

2.427

1.375

2.323

2.583

2.795

4.02

10.88

Actual

0.404

0.507

1.614

1.232

1.310

3.1

0.557

36.9%

69.5%

47.7%

46.9%

77.1%

5.1%

Performance 16.6%

3/26/12

Budget Forum

5353

Growth rates: (2003-2004)

2003

2004

2005

2006

2007

2008

2009

14.48

18.55

36.53

44.63

41.12

86.62

44.44

Growth

28.10%

96.9%

22.20%

-7.9%

110.7%

-48.7%

Budget: education 1.96

1.80

2.55

6.20

7.38

11.86

8.05

Growth

8.16%

41.67%

143.14%

19.03%

60.70%

-32.6%

0.507

1.614

1.23

1.310

3.1

0.557

25.5%

218.3%

-23.8%

6.5%

136.6%

-82.3%

Actual budget
(State)

Capital
expenditure:
education

0.404

Growth

3/26/12

Budget Forum

5454

3/26/12

Budget Forum

5555

3/26/12

Budget Forum

5656

3/26/12

Budget Forum

5757

General features of higher education

budgets
2006

2007

2008

2009

State Budget

55.6

57.77

105.20

120.90

Higher Ed Budget

1.84

3.04

3.73

5.89

% of State Budget

3.3%

5.3%

3.5%

4.9%

Rate of change

65.7%

22.7%

57.9%

Recurrent

1.21 (65.76)

2.23 (73.36%)

3.06 (82.04%)

4.63 (78.6%)

Capital

0.620 (34.1%)

0.806(26.5%)

0.670(18%)

1.26 (21.4%)

Budget estimates

1.84

3.04

3.73

5.89

Budget actual

1.59

2.19

4.08

3.40

Index

86%

72%

109.4%

57.7%

Capital estimates

0.628

0.806

0.67

1.26

Capital actual

0.610

0.212

0.690

Composition

Performance

3/26/12

Budget Forum

0.860

5858

Performance: selected institutions

2005

2006

2007

2008

2009

Estimates

N450 m

N1.00 b

N1.12 b

N1.094 b

N2.91 b

Actual

N670 m

N278.5m

N512 m

N807 m

N309 m

28%

46%

73.8%

10.6%

SUBEB

Performanc 149%
e Index
SSMB
Estimates

N45.8 m
(2003)

N10m

N20.4 m

N14 m

N100 m

Actual

N5.00 m

N3.3m

N0.00

N8 m

N00

33%

0%

57%

0%

Performanc 10.9%
e Index
College of
Education
3/26/12
Estimates

N25 m

Budget Forum
N20m
N32 m

N90 m5959 N204 m

Performance.. contd
KUT

2003

2004

2005

2006

2007

2008

2009

estimates

N684m

N80m

N192.5

N450m

N540m

N249

N576m

actual

N193m

N76m

N3.1m

N510m

N186.9m

N350.7m

N0.00

Index

28%

95%

1.6%

113%

35%

71%

0%

N95m

N175m

N200m

N315m

N75m

N7.9m

N142m

N80m

78.9%

4.6%

71%

25.4%

Kano Poly
Estimates

3/26/12

Budget Forum

6060

Health care challenges-Kano

Poverty Index

>60

Ratio of Doctors to General Population

4/100,000 Pop

Population Density

509 persons/Sq Km

Fertility Rate

6.7

Deliveries in Health Facility

12.7%

Delivery by Health Professional

49.8%

*MMR

1,025/100,000 live birth

*IMR

114 per 1000 birth

*Measles Coverage

17.8%

*HIV prevalence

2.3%

*TB prevalence

6/10,000 pop /year

3/26/12

Budget Forum

6161

Health sector budget estimates 20032010

Year

2003

2004

2005

2006

2007

2008

2009

2010

Total Budget
(Billion N)

34.76

35.81

47.54

55.60

57.77

105.21

120.92

110.69

Health (Billion 0.632

N)*

0.782

1.301

3.350

3.43

5.77

9.11

8.873

Share in total 16.8%

budget

2.2%

2.7%

6.0%

5.9%

5.50%

7.5%

8.0%

3/26/12

Budget Forum

6262

Budget estimates: health sector

3/26/12

Budget Forum

6363

Capital /budget ratio

3/26/12

Budget Forum

6464

Health sector, actual spending

Year

2003

2004

2005

2006

2007

2008

2009

2010

Total Budget 14.48

(Billion N)

18.55

36.53

44.63

41.12

86.62

44.44

47.01

Health (Billion 0.320

N)*

0.649

0.844

2.46

4.35

5.37

4.432

7.02

Share in total 2.2%

budget

3.5%

2.3%

5.5%

10.6%

6.2%

9.7%

14.9%

3/26/12

Budget Forum

6565

How is budget spent?

Year

2003

2004

2005

2006

2007

2008

2009

2010

Total Budget 0.320

(Billion N)

0.649

0.844

2.46

4.35

5.37

4.432

7.01

Recurrent
(BN)

0.145

0.108

0.219

2.199

3.448

4.081

3.139

5.577

Capital (BN) 0.175

0.541

0.625

0.261

0.902

1.289

1.293

1.439

Share of
Capital %

83.4%

74.1%

10.6%

20.7%

24.0%

29.2%

20.5%

54.7%

3/26/12

Budget Forum

6666

Capital-recurrent expenditure

3/26/12

Budget Forum

6767

Budget performance
Year

2003

2004

2005

2006

2007

2008

2009

estimates
(Billion N)
Actual (Billion
N)*
Variance
(Billion N)
Index %

0.632

0.782

1.301

3.350

3.43

5.77

9.11

0.320

0.649

0.844

2.46

4.35

5.37

4.43

0.312

0.133

0.457

0.890

-0.92

0.40

4.68

50.6%

83.00%

64.87%

73.4%

126.8%

93.07%

48.6%

3/26/12

Budget Forum

6868

3/26/12

Budget Forum

6969

3/26/12

Budget Forum

7070

Performance: education Vs health

3/26/12

Budget Forum

7171

Year

2003

2004

2005

2006

2007

2008

2009

Education Index 16.6%

%

36.9%

69.5%

47.7%

46.9%

77.1%

5.1%

Health Index %

83.00%

64.87%

73.4%

126.8%

93.07%

48.6%

50.6%

3/26/12

Budget Forum

7272

Budget per capita: key sectors

2006

2007

2008

2009

%change

education

625.6

753.1

1,186

774

23.7%

Health

258.9

443.9

537

426.2

64.62%

agriculture

648.4

284.7

453.0

359.6

-44.5%

Water resources

95.7

318.4

401.0

278.8

191%

W&H

97.9

383.7

637

472

382%

LPP

203.2

116.3

828.0

733.7

261%

3/26/12

Budget Forum

7373

Budget per capita

3/26/12

Budget Forum

7474

Budget per capita

3/26/12

Budget Forum

7575

Budget per capita: key sectors

3/26/12

Budget Forum

7676