• Thursday, December 07, 2023
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Lagos toe FG’s squandermania despite record debt profile

Lagos State revenue and budget in for years

Perfumes, rechargeable fans and light, monthly “empowerment” for wife of deputy governor, supply of chicken, air freshener, renovation of a church, and expense on the governor’s legal team, among others were some of the items that found their way into the public procurement list approved by the Lagos State government in the 2023 budget.

Lagos State, known as Nigeria’s commercial capital, is by far the richest state in the country in terms of revenue generation and capital deployment. So it wasn’t a huge surprise when the APC-led Babajide Sanwo-Olu government, under the watchful eyes of the leaders of the state house of Assembly, signed a N1.768 trillion budget in 2023 into law.

It was in the same year that the domestic profile of the state would surge to its highest, chalking up a total of N996.44 billion (N966,440,044,235.35) as at June 2023. The state’s foreign debt also stood at $1.26 billion (N1.05 trillion) which means the state would need to spend nearly 100 percent of its budget to service its debt. This is a similar situation with the federal government currently. The high debt profile nonetheless, the Lagos State government still allocates money on items that have little or no direct impact on the welfare of Lagosians.

“It’s actually mind–blowing. Lagos is so badly governed, it’s unreal. And there is money to make a meaningful difference. These guys cannot organise waste collection but want to ride bulletproof Lexus,” said Feyi Fawehinmi, co-author of ‘Formation: The Making of Nigeria from Jihad to Amalgamation’.

The budget, dubbed “Budget of Continuity”, was in magnitude the highest for the state and any state in the country. According to the governor, it was not only “aggressively” focused on completing ongoing capital projects, it would also expand intervention programmes and intensify social support to citizens and their means of livelihoods.

The state was ranked among the 10 cities at the bottom of The Global Liveability Index 2023: Optimism Amid Instability, by the Economist Intelligence Unit (EIU). Lagos was ranked 170 out of 173 cities the EIU surveyed. The state also has a high child mortality with 35 newborns out of 1000 births expected to die. This is despite allocating 13 percent of the total budget to provide affordable and world-class education, healthcare and social services.

The state which recently got its first speed train after over a decade of budgeting for the project, is overburdened by poor road infrastructure which often gulps much of capital expenditure. For example, the government allocated 27.3 percent (N482.86bn) of the N1.768 trillion to provide what it calls “modern infrastructure”.

However, a recent letter to the Lagos State governor publicly made available by Funsho Doherty, who contested in the 2023 gubernatorial elections under the platform of the ADC, has revealed the details of the budget by going through the register of public procurement awards by the state, ministries and departments.

Read also: On Lagos debt profile

“I just wrote an open letter to the Governor on *Public Procurement awards reported by LASG for the 2nd and 3rd quarters of 2023*, highlighting a number of issues for further scrutiny and remedial action. Judicious use of public funds is always important, and is especially so now,” Doherty wrote.

A look at the public procurement documents now circulating around the web showed that the state allocated N2 billion to supply rechargeable fans, rechargeable lights and a fridge for the office of Deputy Governor.

The government paid a company N5.38 billion to update – not create – the Strategic Transport and Mobility Master Plan for Lagos Mega City Area. N30 million was allocated for a monthly outreach of indigent citizens for the wife of the deputy governor. A yearly calculation of the expense amounts to N360 million. The wife of the deputy governor was also entitled to N30 million monthly empowerment programmes, with a total for the year at N360 million.

The state also budgeted N152.11 million to restore water supply at Iduganran palace and slightly above that N159.31 million for the proposed Adesalu Health Care Centre at Onasa Community Ibeju-Lekki. There is also a N3.1 billion budget to engage the services of a loan transaction arranger and financial adviser to the Lagos State government and LAMATA on the red line project.

Read also: Lagos, four others owe 34% of states’ ₦5.34trn domestic debt

Other expenses include N440.7 million for purchase of a brand new Lexus LX 000 Bulletproof Sport Utility vehicle for use in the office of the Chief of Staff; N13.4 million for the office of the Chief of Staff to supply chicken across the wards; N7 million for liquid fragrance in the office of the governor; N20.8 million for decoration of venue for political delegates congress.

There are also substantial budgetary allocations to the running of Imota rice mill. As Doherty noted in a comment, the Lagos State government had in October 2022 announced that it signed an agreement for WACOT.Limited to manage the Imota Rice Mill.

Sanwo-Olu had said that the state government was desirous operationalising the rice mill through the technical services of WACOT rice Limited, a subsidiary of TGI Group providing commissioning and kick–off operationalisation support service. Not much detail was given as to the actual funding of the running of the mill. From the public procurement document, the state is still allocating billions of naira to the mill.

The governor also allocated N200 million to the Ministry of Justice to be used to pay the lawyers that defended his election at the tribunal.

“We took Mr. Sanwo-Olu, Mr. Hamzat, APC and INEC to court. We did not take the Lagos State government to court. Why should the state fund his legal fees?” Gbadebo Rhodes-Vivour, gubernatorial candidate of the Labour Party in state noted in a post on X. “Why should citizens’ taxes be used to pay for his representation? This is why they are always quick to say “Go to court”, because they are so irresponsible and cheap, to not even pick-up their legal bills.”

Lagos budget since 2006
Source: Budgetpedia

Data from Budgetpedia shows that the domestic debt in the state has steadily grown since Sanwo-Olu took office as governor, from N444.2 billion in 2019 to N996.44 billion as of June 2023. Foreign debt rose from N437.9 billion in 2018 to N1.05 trillion.as of June 2023.

Read also: Lagos procurement scandal: Billion naira fans and phantom contractors

Within that period, the state health officials have reported that at least 60 percent out of 325 primary health centrres in the state are in deplorable conditions. In other words about 197 primary health care centres in Lagos are in deplorable conditions and may not be getting the needed attention because of frivolous spending.

It is equally important to note that total expenditure has exceeded the budget since 2019 to 2021. The figures aligned for the first time in 2022. The government has yet to offer explanation why this has been the case for about three years.