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-Loans, bond Issuance to take charge of N350bn shortfall
IBRAHIM QUADRI
With the signing of the Lagos Appropriation Bill into law, the State is billed to rake in N924.805bn by December, 2023. This is an equivalence of N77.067bn monthly generation revenue.
This was disclosed by the State Commissioner for Economic Planning and Budget, Mr Sam Egube during a press briefing on Tuesday at Alausa, Ikeja.
Some of the cabinet members who were present during the briefing included, the Commissioners for Finance, Dr Rabiu Olowo, Information and Strategy, Mr Gbenga Omotoso, Transportation, Dr Federic Oladeinde, Works, Engr Aramide Adeyoye, Education, Mrs Folasade Adefisayo among others.
The State Governor, Mr Babajide Sanwo-Olu had tagged the 2023 budget as budget of Conntinuity, noting it was to complete all ongoing projects in different parts of the State.
On October 27, 2022, Sanwo-Olu had presented a N1.692trn to the State Assembly, which was passed on December 12, 2022 by the lawmakers. The Assembly, however, raised the approved budget by N76b to N1.768Trillion
In January 27, the Governor has thereafter signed the budget size of N1.768Trillion into law.
The governor, while presenting the budget to the State Assembly, said the State government was expecting a N1.342b revenue to fund the budget.
The deficit of N350.411bn is projected to be funded by a combination of Internal, External Loans and Bond Issuance.
LIRS is expected to contribute 65% (N682,906bn) of the projected TIGR, while about 23% (N241.899bn) is expected to be generated by other MDAs of government.
Recall that the approved Y2022 Budget of ₦1.758trn which had a total revenue of ₦1.237bn and deficit financing of ₦521.275bn; with the Capital to Recurrent Ratio that stood at 66:34 with Capital Expenditure of ₦1.167trn and a Recurrent
Expenditure of ₦591.281bn. Egube said as at December 31st, 2022, the budget posted a performance of 74%. with Revenue Performance at 77%, while Capital & Recurrent Expenditure performed at 70% & 81% respectively. Adding that the 70% performance of Capex is as a result of the late closure of the 134.815billion Bond transaction, which was oversubscribed in December 2022 and utilization differed till Y2023.
The Commissioner therefore stated the State approved Y2023 Budget of ₦1.768trn is made up of ₦1.020trn (Capital Expenditure) and ₦748.097bn (Recurrent Expenditure- Debt Charges inclusive), resulting in a Capital to Recurrent ratio of 58:42.
The total Revenue is estimated at ₦1.418trn, while deficit-funding requirement is ₦350.411bn, which at 25% of Total Revenue implies that the Budget is strongly dependent on Revenue. As a result of this, the commissioner urged the residents and those that have business with the State to be Tax conscious fulfil their responsibilities as and when due.
Egube said, “The State Government has reiterated its stand in continuing to investment in provision of affordable Homes for the people of Lagos through its Social Housing Programme by injecting a total of N67.1bn. Some of the social housing program the Budget targets includes: the completion of 444 units of building Projects at Sangotedo Phase ll, completion of 420 units of building Projects at Ajara, Badagry Phase ll and the construction of 136 units of building Projects at Ibeshe ll among others.
“The State government commitment towards the State’s 5-year Agric road map had seen to the commissioning of the Imota Rice mills which will provide support to farmers and improve food systems generally in the State. In addition to this, the State will invest a total sum of N45.1bn for Food Security through Cattle Feedlot Project, Fish Processing Hub programmes and Wholesale Produce Hub & Market thus improving wholesomeness of food, reduction in food prices and optimization of the Agricultural sector.”
He added that “The N86bn investment in Public Order and Safety Sector shows the State’s continuous commitment to ensuring that Lagos is safe for living, working and investment. It is important to note that N12bn has been earmarked for the Provision of Rescue and Emergency operation equipment for Disaster management. Also, provision has been made for surveillance and body cameras for security monitoring.
He said the year 2023 Budget will invest in strengthening intelligence gathering/capacity building capabilities together with improving the ease of doing business through the Smart-City project, the Lagos new Data Center project, Eko Excel project, E-GIS and the Oracle upgrade project.
According to the Commissioner, $LIRS is expected to contribute 65% (N682,906bn) of the projected TIGR, while about 23% (N241.899bn) is expected to be generated by other MDAs of government. We shall achieve this by deepening the revenue and increase the tax net through the deployment of technology, economic intelligence, data gathering, collaboration and analytical tools amongst other initiatives.
“We believe that there are huge revenue generating opportunities in the real estates, transportation, and trade sectors. Through active management of our assets, we will organize ourselves better to harvest more appropriate taxes and income from our capital investments and human capital development.
Egube said “The State is totally committed to ensuring that the dividend from its investments in Integrated Transport Infrastructure, which will materialize into the birth of the fully functional light rail (Red-Blue) system, the first of its kind by a sub-national Government in Africa and the 37km Fourth Mainland Bridge will be felt by the citizens of the State. These will reduce commute time to millions of Lagosians, reduce congestion on the existing Carter, Eko, Third Mainland Bridges and Ikorodu Road thus increasing productivity, quality of life, as well as improving the overall transportation system in the State.”
The Commissioner highlighted the infrastructure Budget captures in the budget as follows: Construction of the second phase of the blue line from Mile 2 to Okokomaiko, Completion of 8 Stadia across the 5 IBILE divisions of Lagos State, to facilitate youth development, engagement and community sports, Continuous Construction and Rehabilitation of schools across the state to significantly improve access to quality education, Completion of 130 bed New Massey ultra-modern and fit for purpose Pediatric programmed and emergency general hospital that will be the largest specialist children hospital in Sub- Saharan Africa.
Others include, the Completion of the modern 280 beds General Hospital serving the people of Ojo and its environs which is currently at 47% completion, Completion of the mental health facility in Ketu Ereyun in Epe local government, Completion of the Opebi Link bridge to Maryland that will improve significantly travel time and alternative route options the axis, Rehabilitation/Upgrading of Phase II Eti-Osa – Lekki-Epe Expressway Project from Eleko T-Junction – Abraham Adesanya among others.
He Stated that “most of these projects are contractor funded, with structures that provide very beneficial payment terms that gives the state upfront value (front loaded) ahead of payments; thereby increasing the sustainability benefits to the State.”
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