Lagos Moves To Review N1.169Tn, Y2020 Appropriation Bill
Lagos State Executive Council has approved a revision of the state’s Y2020 budget to help mitigate the economic and social upheavals precipitated by the coronavirus pandemic on the state.
The state’s Commissioner for Economic Planning and Budget, Mr. Sam Egube who revealed this to journalists said the review proposal aims to reduce the budget to N920.5 billion as against the amount of ₦1,169 trillion hitherto approved by the State House of Assembly.
The Lagos State House of Assembly had in December, 2020 passed N1.169Tn, Y2020 Appropriation Bill for the State.
The approved budget contained N457bn recurrent expenditure and capital of N711bn showing a strong preference for capital projects at 60 per cent.
Egube informed that the first quarter of Y2020 recorded a budget performance of 56 per cent (₦163.2Bn); which in absolute terms is higher than the 68 per cent (₦148.3Bn) recorded for the same period in 2019.
The Commissioner listed some of the factors that necessitated the review of the Y2020 budget to include fall in crude oil prices with deleterious effects on statutory allocation expectations, downward pressure of IGR, devaluation of the Naira, reduced public and private investment, Increased inflation, decline in demand for goods and services and reduction in manufacturing activities, which portends lower GDP growth and Increased unemployment.
Egube stated that part of the state’s holistic approach to the COVID 19 shock already adopted by the state government going forward included maintaining a Strong Pandemic Response, Restarting the State Economy and Reimagining the way Lagos State operates
He explained that with the Strong Pandemic Response, the state government will engender food security and safety net mechanism, economic stimulus, and ensure public safety and wellbeing.
“To Restart the Economy, we are going to optimize the state’s budget for investments in jobs and priority sectors through job creation, economic stabilization and fiscal consolidation. While to Reimagine the State Economy, we will prepare the State to operate and thrive within the new reality with digitization, business environment reforms, improved economy and diversification of revenue sources” the Commissioner added.
He gave the proposed breakdown of the revised budget as follows; the Total Budget Size is reduced by 21 per cent from N1,168.562bn to N920.469bn with the Financing Deficit increasing slightly by 11 per cent from N97.533bn to N108.005bn, Recurrent Expenditure (Debt and Non-Debt) declines by 10 per cent from the initial N457.529bn to N411.608bn and Total Capital Expenditure is reduced by 28 per cent from N711.033 to N508.861
The revised Total Revenue, according to Egube, represents a drop of 24 per cent from the projected N1,107,029bn to N812.464bn
