A cumulative sum of N5.99 billion has been saved from the implementation of the Treasury Single Account (TSA) policy in Lagos State since the current administration came into office 11 months ago, Mustapha Akinkunmi, commissioner for finance, has disclosed.
Akinkunmi, who spoke on the finances of Nigeria’s biggest economy state, Tuesday, in Ikeja, said with shrinking federal transfers, consequent upon the crash in oil prices, Lagos was increasingly looking inward to strengthen its financial base in order to meet obligations to the people and businesses operating within state.
In this wise, not only are possible leakages in the financial systems plugged, the state, he noted, is also firming up and widening its tax net. This, he explained, is responsible for the increase in the Internally Generated Revenue (IGR), which accounted for 56 percent of the total revenue earned in 2015.
According to Akinkunmi, of the total N399.382 billion that accrued to the coffers of the state in 2015, taxes collected by the Lagos Inland Revenue Service (LIRS) was N225.041 billion, representing 56 percent; other revenue, N58.065 billion, accounting for 15 percent; statutory allocation, N43.235 billion, representing 11 percent, while Value Added Tax (VAT) was N73.041 billion, which represented 18 percent of the total revenue for that year.
Akinkunmi also gave a breakdown of the earnings of the state in the last quarter of 2016, which showed IGR again contributing most amid worsening federal transfers. Within the first three months of the year, the state earned N101.695 billion. Of this figure, IGR stood at N76.055 billion while federal transfers including VAT accounted for N26 billion, of which only N7 billion was received as statutory allocation.
The current administration also successfully re-engineered the state’s outstanding internal loans to reduce burden on IGR and technically saved N3.8 billion per month, which, he said had been invested in capital projects.
“This was achieved by re-negotiating interest rates from an average of 18 percent monthly (N5.35bn monthly payment) to 12.5 percent (N1.52bn monthly payment). The state restructured its outstanding bonds from bullet payment to amortising payment to reduce debt service resulting in huge savings recorded from this initiative.
“Through this, we have also achieved savings of over N500 million in monthly contributions to Consolidated Debt Service Account and over N40 billion saved in interest payments over the lifetime of the instruments,” the commissioner said.
