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An unbroken tradition of high budget performance

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About seven years ago, December 17, 2007, I stood before this House to present my first budget as governor of Lagos State. How time flies, and if I must say so, they have been good times.  Good times for the people of Lagos, for the reputation of our state, our party and our government that has defined itself as a model of public service.

Even the progress we have made is embodied in where we gather today. When I presented that first budget, it was in a legislative chamber that once represented the far-sightedness of one of my illustrious predecessors. Today, this generation has built a new legislative chamber that ranks easily as the best in the country, and from which many pacesetting, life-changing and odds-defying laws like the Security Trust Fund Law, the Cremation Law, the amended Road Traffic Law and the amended Coroner’s Law, to mention a few, have been debated and passed for the benefit of our people. Thus, while the old legislative chamber has become historic, the legislative ideas that it represents remains enduring in this new building.

The breakdown and sectoral allocations

As a grateful generation, this legislative house has acknowledged the service of this visioner and named the original chamber after him. It is now known and called the Lateef Kayode Jakande Legislative Chamber and it is still being put to use.

Today, my own journey comes one step closer to the terminus, as I present my last budget as governor. Everything has a time and a season. This is the time to wind down and prepare to hand over to a new team of leaders who hopefully would raise the bar of service even higher.

If we were still naming budgets, it would have been difficult to choose a name, because there is a little and a lot for almost every person in this budget. Thankfully, that era of budget naming is very long behind us.

Today, our budgets are more remembered for their level of implementation, their sectoral allocation, and most importantly their impact on our people. So I will start by recapping the highlights of our implementation of the 2014 Budget which as at the end of the 3rd Quarter on 30th September 2014 had achieved an 86 percent performance cumulatively.

The 1st, 2nd and 3rd quarter performances were at 67 percent, 106 percent and 84 percent, respectively, to give us the total cumulative of 86 percent at the end of Quarter 3.

From the first budget of 2008 to 2013 this has been the character of our budgets, achieving implementation levels of no less than 70 percent and in the last three years now comfortably performing in the 80s such as 89 percent in 2012, 85 percent in 2013 and as at September this year 86 percent.

As I said at the 3rd Quarter Budget report, a quarterly reporting that has become a hallmark of Lagos budgeting which we are pleased some equally serious states have adopted, our budget implementation successes of over 80 percent are a tough act to follow. It is the strongest evidence of the dedication of the public servants of Lagos, if any is needed, and I cannot thank them enough.

For macro-economists, these numbers are good, but it is the micro assessments that really give meaning to a budget. This is where budget impact in Lagos has been most defining in the number of life-changing products, services and benefits our budgets have delivered, using the human resources and the taxes at our disposal. I have made it a duty to report these developments, products and services to you every 100 days since 2007 and this year I have done so on April 2, 2014, 2500 days, on July 11, 2014, 2600 days, and on October 19, 2014, 2700 days.

While no useful purpose will be served by repeating them here, I cannot leave the issue of service to the people and impact on their daily lives without sharing with you two text messages I received in the last few days. The first text from a resident says: “Good morning. Just like yesterday when we started the training programme, to the glory of God I can do things which took many years to learn. Thanks to God and you. Lastly, thank you for empowering so much people with the training kits materials needed for future practice. God will reward you.”

And the second, from a resident who sent me a complaint about a burst pipe which I forwarded to the Lagos Water Corporation, reads: “R-E-P-A-I-R-E-D. Burst major underground water pipeline in Okota, which I informed you about, has been fixed. It was painful seeing all that clean, precious water gushing into the canal. Thank you for giving 3149 men and women opportunity to tell their families: ‘I am going to work’. I don’t regret paying tax in Lagos. Regards.”

As I said a few years ago when we set out on this journey, “If people did not believe what we promised to do, they will be unable to disbelieve what we have done.” As recently as September and October, we were still opening and handing over new schools in Ifako Ijaiye, a new Energy Academy in Ikeja, a new Independent Power Plant in Ikeja to provide uninterrupted power to critical services like healthcare in LASUTH, security in the State Police Command, water supply in the Ikeja Water Works and access to justice in the Ikeja High Court and Magistrate courts.

Life-changing assets under development such as the 70 million gallons per day Adiyan Water Works, the Lagos Blue Line Light Rail project and the Mile 12-Ikorodu Town 13.5km expansion and BRT corridor are making progress. We are also touching lives very directly by providing training to over 25,000 Lagosians, mostly women and young people, who are learning new surviving and entrepreneurial skills that provide a livelihood for them under our expanded economic empowerment programme.

In the same way, we directly set up over 3,000 young and old farmers, by taking them through training and imparting new skills, while providing them with title documents to their farmlands as collateral to access loans, in addition to directly supplying them with farm implements, tools, seedlings, and inputs to set them up to become productive members of our society. Today, I am proud to say that every morning when they wake up, they do not do so to despair and uncertainty. Instead, because of our public servants, because of our prudent and compassionate use of your taxes, these members of our society can say every morning when they wake up: ‘I am going to work’. This is the dignity, the participatory democracy and the brighter and rewarding future that our government promises.

Our budgets have been a critical tool to their delivery. Your support and useful criticisms, suggestions and encouragement have been more defining tools to bring them to fruition. Thank you.

Today, I therefore now present before you our proposals for 2015 for a total sum of N489.690 billion. Our Capital to Recurrent ratio is 51:49 for Y2015 which is the same as Y2014 Budget.

As you will observe, we have retained essentially the same budget size as 2014. This is for many reasons. One reason is that we have kept a zero deficit in order to ensure that the next government does not inherit a deficit. This will give them room to start off very quickly when their programmes begin to crystallise and they may need to raise funds in order to start off.

Another reason is that our budgets, like all good budgets, are not only defined by plans and expectations, they make more sense if they are defined by resources. Our resources have been severely, adversely affected by the management and lack of transparency of the Federal Government and its agencies of the nation’s oil proceeds. The Federal Government still owes Lagos State government N51 billion certified and unpaid, out of N59 billion expended on Federal Government roads in Lagos. They also owe pension obligations of N673,673,355.25 (six hundred and seventy-three million, six hundred and seventy-three thousand, three hundred and fifty-five naira twenty-five kobo) which they have not paid.

And as all of us are aware, oil prices have dropped from $100 per barrel and above to just around $80 per barrel at the time we finalised the budget. Our monthly receipts from FAAC have fallen below our usually conservative expectations for the first time in seven years. And lately, we are noticing that reduced patronage of the tourism and entertainment facilities has occurred in the aftermath of the Ebola outbreak. This has translated to reduced consumption and consequently reduced incomes in the Consumption Tax sub-head of our Internally Generated Revenue.

Because we will not implement this budget fully by ourselves, we have thought it fit to moderate expectations in order to avoid disappointments. I remain optimistic, however, that our workers’ successful and courageous containment of the Ebola infection is the strongest statement of who we are and in no time I expect that activities in those tourist facilities will pick up because the confidence in our government is very high out there.

In spite of these challenges, the 2015 budget will focus on payment of contractors’ liabilities to enable us complete as many projects as we can and progress on those that we cannot complete before handing over. For example, out of the 400 roads that we promised, we have completed 190 over the last three years, with 210 at very advanced stages mostly nearing completion. The on-set of dry weather provides the opportunity to complete all of them.

We have also started compiling a list of another 400 roads that we will hand over to the next administration for their consideration, adoption and implementation. This should help to accelerate and deepen the penetration of our policy of reconstructing inner city roads that are several decades old.

One of the highlights of the 2015 Budget will be the settlement of outstanding pension liabilities that were imposed by the Federal Government which later became contentious. Without consultation with the states, the Federal Government had reviewed pensioners’ entitlements upwards by 142 percent without a corresponding 142 percent upward review of states’ revenues. While I remain convinced that the Federal Government which receives 52 percent of national revenues and leaves the 36 states and 774 local governments to share 26 percent and 20 percent of national revenues has no legal basis to impose financial obligations on states and local governments, our government’s compassion for the plight of these pensioners has weighed more heavily on our minds than the legal misfeasance of the Federal Government. Our government has therefore committed to pay and now budgets for the 142 percent arrears, in addition to 12 percent and 6 percent recent reviews. This is the least that we think these public servants deserve.

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Apart from this, our Contributory Pension has been largely up to date, except for a few parastatals for whom we are also making provisions. Today, the Lagos State government’s implementation of the Contributory Pension Scheme is the most successful in the country. We want to substantially reduce pension difficulties in Lagos before the next administration resumes and even if we cannot totally solve them, we intend to leave behind a sustainable plan for their final resolution.

As challenging as resources are, we have kept our focus on human capital development and our sectoral allocation to education has increased from 15.78 percent in 2014 to 16.8 percent in 2015. This does not include the school milk programme budget in the Ministry of Health, the provision of running water in all schools out of which we have done 495 through the Lagos State Water Corporation budget, or the school waste removal and school drainage, which is carved out by the Ministry of Environment. It also does not include the annual maintenance contracts for repairs of breakages in our public schools, which is carried out through the Ministry of Works. It also does not include the supply and maintenance of computers to the schools by the Ministry of Science and Technology.

Being an excerpt from the governor’s Y2015 budget speech presented at the chambers of the Lagos State House of Assembly, Alausa on Monday, November 24, 2014.

Babatunde Raji Fashola