The N813bn proposed budget for 2017 fiscal year by the Lagos state government is the biggest ever to be presented by any Nigerian state. TOPE MUSOWO looks at the unique features of the budget
The Lagos state Governor Adewunmi Ambode, last Tuesday, announced a N813bn budget proposal for 2017fiscal year, The budget which the governor christened: The Golden Jubilee Budget, is the largest budget ever by any state in Nigeria. Looking at the size of the budget which represents 18.5 per cent over the 2016 budget, the governor said the state had embarked on extensive revenue collection reforms that will read to more effective multi-pay channels and improved administration of revenue collection.
It could be recalled that the Lagos state budget for 2016 fiscal year presented to the State House of Assembly around this same time last year was N662.588bn with a total revenue of N542.874 and a deficit financing of N119.715bn,to which the governor said as at 31st October, 2016 it performed 71%.
The total revenue on the other part has performed 76% he said, adding that “by the time we present the full year budget performance, the Y2016 budget performance would have improved to about 86% as a result of various measures that has been taken by this administration to drive the implementation and performance of the budget”
Giving the key components of 2017 budget, Ambode said recurrent expenditure would gulp N300.535billion while N512.464billion would be dedicated to capital expenditure, representing a Capital/Recurrent ratio of 63 percent to 37 percent.
According to the governor, road construction, rehabilitation and maintenance would be one of the key focuses of the budget, adding that efforts would be geared towards roads that will open up the hinterlands, improve connectivity in the State and reduce travel time.
He listed some of the road projects to include Murtala Mohammed International Airport Road from Oshodi, Agric-Isawo-Owotu-Arepo Road in Ikorodu, Igbe-Igbogbo Phase II- Bola Tinubu Way in Ikorodu, Ijegun Imore Phase II Amuwo in Ojo axis, Oke-Oso-Araga-Poka in Epe, Epe-Poka-Mojoda in the Epe axis and the
This budget proposal is the biggest ever in the history of any state in Nigeria till date, which may likely mean that, in the preparation of 2017 budget, recent developments around the world must have been put into consideration especially in the global and national economy spheres.
It is likely that the state have maintained a conservative approach in estimating its Federal Allocation due to falling oil prices that was about $41.98 per barrel at the time it finalized the budget; the State expects an increase in Federal allocation through 13% derivation from Oil & Gas in 2017.
Apparently, the governor must be targeting Internally Generated Revenue (IGR) made up of taxes, rates, levies among others, as a strategy to drive the budget
The Commissioner, Ministry of Finance/Economic Planning and Budget ,Mr Akinyemi Ashade,who was addresing a press conference on Tuesday about the appropriation bill gave their fiscal strategy as follow;
Entrench sustainable government expenditure using realistic revenue projections, Capital/Recurrent Ratio of 63:37 is proposed for Y2017 as against 58:42 in Y2016; aggressive growth in IGR through taxes and non tax revenue to N30bn per month, full deployment of Oracle Business Solutions to eliminate Revenue leakages; sustainable fiscal balance with appropriate level of public sector borrowing and acceptable aggregate public debt; foster a robust environment for increased private sector investments through PPP initiatives and other strategies for increased Foreign Direct Investment (FDI).
He explained that the Budget Size of N812.998bn will be funded from a total revenue estimate of N642.849billion with the balance of N170.150billion to be funded through a N100bn Bond Issuance Program and a combination ofinternal and external loans.
He put the total Internally Generated Revenue (TIGR) as approximately N477.942bn (representing 74%) of the Total Revenue, the remaining N164.907bn(representing 26%) is expected from Federal Transfers including 13% Derivation.
Lagos Internal Revenue Service (LIRS): LIRS is expected to generate a tidy sum of N360bn, equivalent to 75% of the Total Internally Generated Revenue. We intended to improve on the current 2% revenue to GDP ratio by achieving 5% in 2017 and also bringing more people into the tax net as well as adoption of an automated single billing system.
Year 2017 Proposed Expenditure: Capital Expenditure is proposed atN512.464bn and Recurrent Expenditure isN300.535bn, making up a total expenditure of N812.998billion, this provides an aggregate Capital to Recurrent ratio of 63:37, while allocations proposed for the Nine (9) Function
He also highlighted the key areas the budget will be focusing as follows: Transportation, Wealth and Employment Creation, Agriculture and Food Security, Tourism, Housing, Health, Education, Commerce and Industry, among others.
A Lagos lawmaker, Hon Victor Olusegun Akande, a PDP member, representing Ojo constituency 1 tagged the budget as a budget of performance,and that the Governor brought to bear his experience and training as an accountant by allotting much to capital project which would transform Lagos to the desired mega status the governor has always been his vision.
He added that out of the N813 bn appropriated, the economy will be revived and the tax net would be expanded which will bring in more money for the funding of the budget.
He added that in terms of security, infrastructure, health, education and wealth creation that the government has delivered.
He also averred that,”Mr speaker gave all the house committee chairmen the mandate to call on all the head of the MDAs to bring in their budget performance as a matter of oversight function so as to know to what extend the MDAs has implemented and used the funds appropriated to them in the 2016 budget before the governor came to present the budget ,so I can categorically tell you that the performance of the 2016 budget is up to 75 percent”, Akande said.
Another APC lawmaker, Hon Olayiwola Olawale, reprenting Mushin constituency 11,said the budget is a golden year budget which will see to massive infrastructural development with direct impact in the lives of Lagosians as there will job creation to local contractor and workers.
He however maintains that the tax evaders would not find it easy this fiscal year because the state will harp more on tax payment.
The Speaker of the Lagos State House of Assembly, Rt Hon Mudashiru Ajayi Obasa, in his address during the budget presentation said the house would not fail in its duties to painstakingly look at the nitty-gritty of this budget for the purpose of transforming same for the benefits of all Lagosians.
While assuring that this House, through effective oversight, will ensure that the Year 2017 budget delivers on its promises to stimulate the economy of the state by focusing on infrastructure development, delivering inclusive growth and prioritizing the welfare of Lagosians.
He added that in view of the importance and significance of Nigeria and its population in African economy and that of Lagos State in Nigerian economy, coupled with the fact that the state is recognised as the fifth largest economy in Africa, there was no doubt that Lagos State alone could bring about the economic recovery of this nation, thereby pulling us out of the present economic recession we find ourselves. Hence, he appealed to the Senate to reconsider the state’s stance on the issue of its special status.
The governor in his speech also disclosed the Year 2017 budget was their “Golden Jubilee Budget” and the administration would leave no stone unturned in ensuring its full implementation, once it is passed into law.
