Lagos State revenues rose by 2 percent to N658 billion in 2020 according to its audited Full Year accounts, seen by MoneyCentral.
The marginal increase in revenue was mainly due to the rise in one-off grants and donations of N23.2 billion related to the Covid-19 pandemic.
Adjusting for the one-off grants, Lagos total revenue in 2020 would have declined by just 1 percent year-on-year to N635.2 billion, which typifies the resilient and robust revenue profile of the State.
A breakdown of Lagos State’s total revenue for Full Year 2020 showed that income from internally generated revenue (which increased by 9% year-on-year to N451.9 billion) accounted for 71 percent (2019: 64%), while statutory allocation centrally distributed by the Federal Government dropped by 12 percent year-on-year to N51.3 billion represented 8 percent.
Lagos share of value added tax (which rose by 23% year-on-year to N131.9 billion) accounted for 21 percent of revenue.
In addition, due to paucity of funds, the State did not record any capital inflows from the FGN relating to refund on road construction in 2020, compared to the prior year when N63.6 billion was received (representing 10% of revenue).
Lagos State’s Pay-As-You-Earn tax (PAYE), which is considered the most stable and sustainable source of revenue for state governments in Nigeria, grew by 5 percent y-o-y to account for 65 percent of IGR in 2020.
“This is a further testament to the State’s robust and institutionalized revenue collection framework which ensured that personal income taxes were collected during the Covid-19 induced lockdown,” said analysts at Agusto and Co.
Income from other taxes, levies, fines & fees, investment income and asset sales all increased year-on-year to represent 15%, 17%, 1% and 3% respectively of IGR in the period.
Due to the implementation of the new VAT regime which increased by 50 percent from 1 February 2020 to 7.5 percent, LASG reported higher VAT receipts of N131.9 billion in 2020, compared to N107.7 billion in 2019.
In 2020, the State’s share of statutory allocation declined by 12 percent to N51.3 billion as crude oil prices plunged to an average of $39.9 per barrel in the first half of 2020.
Total Lagos State revenues for prior years came in at N644.27 billion for 2019, N652.11 for 2018, and N509.45 billion for 2017.
Lagos Ministries Department and Agencies (MDAs) spent a total of N454.98 billion in 2020, comprising of N201.7 billion for capital expenditure, N146.38 billion on personnel expenses and N106.88 billion on purchase of goods and services.
Lagos had total debt balance of N1.007 trillion at the end of 2020, made up of N543.1 billion foreign debts and N464.33 billion domestic debts. As at 31 December 2020, Lagos State’s total borrowings (N1.007 trillion) represented 153 percent of 2019 revenue.
Total debt levels for the prior years were N785.84 billion in Full Year (FY) 2019, N797.42 billion in FY 2018, and N844.58 billion in FY 2017.
Lagos State’s primary sources of internally generated revenue include taxes on personal income, fines, licenses, fees and levies on business activities, as well as income from investments.
Also, the State receives a monthly share of income from the Federation Account and Value Added Tax Pool as well as grants from development institutions for specific projects.