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Budget of Awakening: In quest for a greater Lagos

Harassment of motorists unacceptable, Sanwo-Olu tells, VIO, LASTMA

In his first appearance before the 9th Lagos State House of Assembly, governor of Lagos, Babajide Sanwo-Olu unveils an audacious trillion naira plan for the state with new opportunities and challenges ahead, writes SEGUN ADAMS.

When Babajide Sanwo-Olu, the executive governor of Lagos state made his first budget presentation to state lawmakers on Friday, November 8, the message was clear: Lagos must awaken to take advantage of unprecedented opportunities-and confront challenges- it now faces.

Sanwo-Olu proposed an N1.168trn 2020 spending plan christened “Budget of Awakening”, to be funded 92 percent by a projected Internally Generated Revenue (IGR) that would see the budget deficit at N97.53bn. The gap will be financed by both internal and external loans

“This budget seeks to aggressively invest in and develop our education, health and other physical infrastructure sectors,” Sanwo-Olu told state legislators.

Specifically, the objectives of the 2020 budget proposal stated include creating an enabling environment to attract private investments to Lagos; aggressively develop, upgrade and maintain infrastructure, and investment in human capital development, i.e. education and healthcare.

Facilitating sustainable social investment and enterprise, and improving capacity to collect due revenues as efficiently as possible, are its other objectives, as well as improving civic participation in governance, and automating public services and engagement; building impactful partnerships with the Federal Government, other States, development partners and civil society; and improving the quality of the environment and public spaces.

Read also: Sanwo-Olu commissions health facility, seeks determinations on reducing maternal mortality

The proposed budget, which is 37 percent higher than the former governor Akinwunmi Ambode suggested for 2019, is also in line with Sanwo-Olu’s broad framework for development captured by the acronym ‘T.H.E.M.E.S’ (Traffic Management & Transportation, Health & Environment, Education & Technology, Making Lagos a 21st Century Economy, Entertainment & Tourism, and Security & Governance).

“We have to rethink our well-being. We have to move from glib statements about Lagos as a centre of excellence,” Sanwo-Olu said. “Lagos has to be truly excellent at something. Something positive, remarkable and admirable. In other words, a Greater Lagos.”

In the budget, the amount earmarked for capital expenditure in the budget amounts to N723.75bn while the recurrent expenditure is N444.81bn giving a 62:38 capital to recurrent ratio.

The proposed capital expenditure is 62 higher than in 2019, while reecurrent expenditure is 38 percent of the 2019 budget.

 

Health

The health budget was raised by 57 percent to N33bn, in the proposal. Lagos will be focusing on the primary health care needs of the population, and increasing partnerships with the private sector in promoting health services.

Also, the budget will cater for a health insurance scheme for 2.5 million people aimed at reducing the burden on the state residents by providing affordable healthcare.

Sanwo-Olu had earlier in the year said for health to be completely affordable and accessible, people must subscribe to the Health Insurance Scheme, where coverage in terms of registration needs to increase.

“This is how developed countries are able to tackle their health financing and access,” he said.

Read also: Education, health top priorities as Sanwo-Olu unveils 2020 budget 

Education

According to the National Bureau of Statistics (NBS), 96.3 percent of Lagosians can read and write- the second-best record Nationwide, and 0.13 percent points lower than in Imo state.

The Sanwo-Olu administration in a bid to double-down efforts on education in the state proposes a significantly increased capital budgetary allocation of N48bn for Education.

Education spending will be 60 percent over the 2019 provision of N30bn.

“We must improve the standard and relevance of our education outcomes to our industries,” Sanwo-Olu said.

The executive governor emphasized plans to work together with local governments to strengthen early childhood education and teachers’ training/administration, leveraging technology.

Infrastructure

As one of the fastest-growing cities in the world, Lagos hosts slightly more than a tenth of Nigeria’s estimated 200 million populations on less than 0.4 percent of Nigeria’s entire landmass.

The need to constantly improve as metropolitan cities around the world upgrade their infrastructure and the population surge in the state informed Sanwo-Olu’s decision to allocate N115bn for capital spend on works and infrastructure in 2020, almost 50 percent of the 2019 budget proposal.

We have to rethink infrastructural development and our transport systems, Sanwo-Olu said, reiterating the need for optimizing the development of relevant infrastructure, including power, transport, drainages and other physical infrastructure.

Among other things, the budget will cover building a broadband metro fibre around Lagos which is about 3,000 km long and has 6 ducts.

The state will look at getting dedicated funding to complete the Lagos light rail Blue line, a 27 km railroad with thirteen stations from Okokomaiko to Marina.

Lagos will prioritise existing projects in the new budget.

The state government said it has so far in 2019 completed and opened the Maternal and Child Care Centers (MCC) in Eti-Osa and Alimosho LGAs, completed and commissioned 492 housing units at the Lateef Jakande Estate in Igando.

It has also donated security vehicles and equipment to our security operatives, launched the Blue Box waste recycling Program, and is almost completing some other projects including 31 roads in Ojokoro/Ijaiye/Ifako Local Government Area, a High Court and Magistrates Court complex in Eti-Osa Local Government Area, and a Police Command Complex in Ojo Local Government Area.

Other projects in view include Public School Infrastructure Rehabilitation Program to transform 300 public schools across the State; construction and completion of Maternal and Child Care Centers (MCCs) in Badagry, Epe and Ojo; desilting of major drain systems across the State; and construction of new ones, and provision of Security and Emergency Equipment.

In the mix also are Road Infrastructure Projects: Lagos – Badagry Expressway; Agege – Pen Cinema Overhead Bridge; Agric – Isawo Road; Bola Ahmed Tinubu; Ikoyi-Victoria Island CBD reconstruction projects – Igbogbo Road, and our Zero Tolerance for Potholes program; Rail/Civil infrastructure works.

Environment

The pivotal role Lagos plays in the national economy notwithstanding, the metropolis has its challenges it must address, including the infrastructural deficit, climate change, and high levels of unchecked rural-urban migration which has implication for the environment.

“Our dear Lagos faces an existential threat, arising from the interplay of demographic and climate change,” said Sanwo-Olu.

To tackle recurrent flooding, the government tripled its capital budget provision N3bn in 2019 to N9bn in 2020.

Social impact and economic growth

The economy of Lagos state, said to be between the 5th or 7th largest economy in Africa, surpassing the national economies of Ghana and Kenya, attracts immigrants from around the country and beyond.

To enhance social and economic welfare, Lagos will be embarking on a number of impact schemes next year and has set aside N11.8bn for that purpose.

The state, which has placed an increased focus on wealth creation, will be taking “deliberate steps in courting a partnership between our people and various development institutions,” it said.

In addition, “we have made provisions for N7.1bn this year, to provide for industrial hubs, parks, graduate internship programs and virtual markets for artisans.”

This fund will be to support Micro, Small and Medium Enterprises (MSMEs) which are the engines for both economic and employment growth.

There 2020 budget includes a personnel cost or wage bill of N167bn and it incorporates the new minimum wage.

Other focus areas for the budget would be security, open government, and human capacity building.

Fiscal soundness of budget

Lagos State generated the biggest Internally Generated Revenue (IGR) of N382.18bn, 33 percent of total revenue generated by all 36 states including Abuja in 2018 according to National Bureau of Statistics (NBS) data.

Total available revenue (FAAC+IGR) for the year was a little more than half-a-trillion considering a net FAAC allocation of N119.02bn.

In half-year 2019 Lagos has generated N205.16 billion with total revenue available at N263.25bn.

So far state Ministries, Departments and Agencies (MDAs) have generated N17.36bn.

Lagos would see likely see revenue close to N600bn in 2019, which means the revenue target of N1.071trn would be more within reach although requiring efforts from the state.

“Since revenue generation is the spine of any budget, this budget supports investment in our revenue-generating agencies,” Sanwo-Olu said.

Sanwo-Olu said Lagos is driving MDAs that generate revenues to be optimal, and the budget aligns with revenue capacity with the deficit expected to be around 9 percent of the total budget.

As at September 2019 revenue performance of the 2019 budget was N468bn or 69 percent of the budget. Total budget performance for recurrent expenditure was 78 percent, while capital expenditure had a budget performance of N217bn or 61 percent.

To push the performance of the 2019 budget to between 80 and 90 percent by this year-end, the government will raise N250bn; N150bn internal loans from banks, while N100bn will be from bonds.

Despite these loans, our sustainability ratio of total debt service to total revenue remains good at 29 percent and we still intend to achieve a capital to the recurrent expense ratio of 55:45 by the end of 2019,” said Sanwo-Olu, emphasizing that all new borrowing would be done under the most responsible fiscal terms possible.

When signed into law, Lagos would have a new budget surpassing a record-high of N1.046trn Ambode signed into law in 2018, and it would be 34 percent more than the current budget.