The Oyo State government on Sunday explained that the downward review of the N273.7 billion budget earlier approved by the House of Assembly to N268.8 billion became necessary due to the need to achieve the fiscal sustainability of the budget.
The state government also said there was no evidence of padding the budget, which was revised and passed by the state House of Assembly last week.
It maintained that contrary to the insinuation in a section of the media that the budget was rejected by the executive because the House of Assembly padded it to the tune of N7.1 billion, the revision to N268.8 billion was aimed at enhancing its overall budget performance.
The commissioner for budget and planning, Adeniyi Farinto, said that the executive only called the attention of the House of Assembly to consider a downward review of the N273.7 billion budget, which it passed into law earlier, based on a set of critical ratios required for the 2021 budget to be sustainable.
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He explained that though the House of Assembly justified the need for the upward review of the budget proposal to accommodate more developmental projects for the state, the need to ensure adequate budget performance in the face of the Covid-19-induced recession led to the advice to the house to revise in order to enhance budget performance.
According to the government, if the earlier approved budget of N273.7 billion was not revised, the state would likely experience lower savings and income and higher interest payments on loans that will likely lead to large tax hikes and spending cuts as well as a decrease in the state’s ability to respond to economic challenges.
