Lagos State Executive Council has approved a downward review of the state’s 2020 budget by 21 percent to help mitigate the economic and social headwinds precipitated by the COVID-19 pandemic.
Sam Egube, the state commissioner for economic planning and budget, who made this known on Thursday at a briefing, said the review brings the budget from the initial N1.169 trillion passed by the State House of Assembly and signed by the governor, to N920.5 billion.
Egube gave the proposed breakdown of the revised budget as follows: Total budget size is reduced by 21% from N1,168.562 billion to N920.469 billion with the financing deficit increasing slightly by 11 percent from N97.533 billion to N108.005 billion
Recurrent expenditure (debt and non-debt) declines by 10 percent from the initial N457.529 billion to N411.608 billion, while total capital expenditure reduced by 28 percent from N711.33 billion to N508.861 billion.
The revised total revenue, according to the commissioner, represents a drop of 24 percent from the projected N1,107,029 billion to N812.464 billion
Egube listed factors that necessitated the review to include fall in crude oil prices with deleterious effects on statutory allocation expectations, slide in internally generated revenue (IGR) and devaluation of the naira.
Others include reduced public and private investment, increased inflation, decline in demand for goods and services and reduction in manufacturing activities, which portends lower gross domestic product (GDP) growth and increased unemployment.
Egube stated that part of the state’s holistic approach to the COVID 19 shock already adopted by the government going forward include maintaining a strong pandemic response, restarting the economy and reimagining the way Lagos State operates
He explained that with the strong pandemic response, the state government wouls engender food security and safety net mechanism, economic stimulus, and ensure public safety and wellbeing.
“To restart the economy, we are going to optimise the state’s budget for investments in jobs and priority sectors through job creation, economic stabilization and fiscal consolidation,” he added.
He said while reimagining the economy, the government will prepare the state to operate and thrive within the new reality with digitisation, business environment reforms, improved economy and diversification of revenue sources.
The Lagos State House of Assembly had in December, 2019 passed the N1.169 trillion 2020 appropriation bill. The approved budget contained N457 billion recurrent expenditure and capital of N711billion showing a strong preference for capital projects at 60 percent.
The first quarter of the 2020 budget, according to Egube, however, recorded a performance of 56 percent, about ₦163.2 billion which in absolute terms is higher than the 68 percent, about ₦148.3 billion recorded for the same period in 2019.