Sunday, January 17, 2021 / 9:12 PM /
Ottoabasi Abasiekong and Ayomide Oguntoye for WebTV / Header Image Credit: WebTV
On Thursday January 15, 2021 the Lagos State Economic Team held a facts-behind-the-figures session with local and international media on its 2021 budget tagged "Budget of Rekindled Hope".
In his opening remarks Mr. Gbenga Omotosho, Commissioner for Information and Strategy, described Lagos as a state of resilience that amidst the COVID-19 pandemic and the #ENDSARS protests, was able to use the twin events as a springboard to push its development agenda forward.
The Commissioner for Economic Planning and Budget, Mr. Sam Egube, said the forum was an opportunity to explain how the Lagos state government was rethinking the state's economy and aligning it with the state's policy agenda called T.H.E.M.E.
He informed the media practitioners that the Lagos state government had a bespoke mechanism in monitoring and evaluating the performance and impact of its budgets.
Overview of 2020
According to the Economic Planning and Budget Commissioner due to the exigencies of the COVID-19 pandemic, the 2020 budget was revised downward by 21% from N1.169trn to N920.5bn.
He said there was a 10% reduction in recurrent expenditure and a 24% reduction in capital expenditure.
Speaking further he said total revenue for 2020 was revised to N812.47bn with a deficit financing of N108bn.
The recurrent and capital expenditures were N413.41bn and N507.06bn, respectively, with capital to recurrent ratio of 55% to 45%.
Despite the challenges of the COVID-19 pandemic and the escalation of violence from the #ENDSARS protests, Egube was happy to report that Lagos state achieved a revenue performance of 93%, while the total capital expenditure and recurrent expenditure performed at 80% and 86% respectively.
He gave highlights on the sectoral performance which include;
A restructuring of the existing internal loans from an interest rate of 20% to 12%, and single digit interest rates in some cases, resulting in a cost savings of about N12bn.
In the health sector for 2020 a total sum of N97.26bn, was budgeted to cater for the construction, refurbishment and equipping of healthcare facilities across the State.
An additional N20bn COVID-19 intervention fund was provided for the health sector to mitigate the risks of coronavirus in the state.
Construction and rehabilitation of over 589 classrooms and 1,568-bed hostels in the secondary and primary schools.
Transportation and Infrastructure
Agriculture and Food Security
In 2020 according to Egube the Lagos state government embarked on the following areas of interventions to increase food security;
Year 2021 Budget
Explaining the details of 2021 budget, Egube said it was tagged "Rekindled Hope" to reflect the determination to rise above the challenges that had affected the state's development indices in the past eleven months.
He said the budget was keenly focused on youth development and human capital development as well as job creation. He added that the budget strengthened the determination of the citizens and the government to make Lagos State a smart city with modern infrastructure while creating additional jobs.
The 2021 budget according to him had ten key objectives which included the following;
The budget estimate was N1.164trn, with a capital expenditure of N702bn, and a recurrent expenditure of N460bn, giving a ratio of 60:40 (Capital to Recurrent).
Total revenue projection for the 2021 fiscal year was estimated at N971.028bn, while the deficit was approximately N193bn. He said the deficit would be financed through a combination of external loans, internal loans and bonds which were well within the government's fiscal sustainability benchmarks.
The commissioner gave the Budget Allocation through a classification of the functions of government which were as follows;
The media session featured a Q&A session with questions, observations and comments around the Blue and Red Line rail projects, the need for Lagos to publish its own GDP report working with the National Bureau of Statistics (NBS), scaling the road infrastructure to cover the entire state, the status of the fourth mainland bridge, traffic management measures, health sector preparedness in 2021 and the need to leverage PPP funding options, prospects for Lagos planning its vaccine roll-out strategy as the epicenter of COVID -19 , prospects for raising Pandemic bonds and the Downside risks for achieving the budget.
Commissioner for Finance Dr. Rabiu Olowo speaking on the N193bn debt said about N100bn would be raised through the capital market, while N52bn was to be sourced externally and N41bn would be funded locally.
He said Lagos state would continue to explore all forms of financing including a suggested "Pandemic Bond" to finance its infrastructure and related projects that could spur economic growth.
Providing clarifications to the fourth mainland bridge project, Engr. Aramide Adeyoye, Special Adviser to the Governor on Works and Infrastructure restated the commitment of the Lagos state government to transparently managing the project which is 38km, and has engaged all stakeholders extensively.
The Commissioner for Health, Professor Akin Abayomi, said the state was exploring a robust approach to rolling out vaccines and effectively monitoring the COVID-19 pandemic and other related diseases, with a view to upgrading all its healthcare centres.
Professor Abayomi said the state had a good model of Public-Private Partnership (PPP) where it plays the role of the 'regulator' while providing an enabling environment for private sector participation in the sector.
In response to the issues of the "Apapa Gridlock", Dr. Frederic Oladeinde, the Commissioner for Transportation, said that Lagos was well-placed to manage the situation because there is a clear strategy and a developed call up system for all trucks that would be allowed into designated trailer parks.
Education Commissioner, Mrs. Folashade Adefisayo, in her remarks said the state was working assiduously to integrate education and technology to boost human capital in the state.