See how Lagos govt plans to finance 2020 budget
A total sum of N886.041 billion internally generated revenue (IGR) is being projected by the Lagos State government to partly finance its 2020 budget size of N1.689 trillion.
The state House of Assembly passed the budget on December 30, 2019 and was signed into effect by Governor Babajide Sanwo-Olu on December 31, 2019. It comprises of N711.033 billion capital expenditure and N457.529 billion recurrent expenditure, showing 61:39 capital to recurrent expenditure ratio in favor of capital expenditure.
The 2020 budget is the second time the state’s budget would cross a trillion naira mark. The first was in 2018 when the administration of Akinwunmi Ambode, the immediate past governor, proposed N1.046.
Of the 886.041 billion IGR projected for the 2020 fiscal year, about N500 billion is expected to be generated by the Lagos Internal Revenue Service (LIRS), meaning that the LIRS will be more aggressive in its revenue drive this year.
Other sources to finance the budget include, capital receipts projected at N232.29 billion and federal transfers, amounting to N184.988 billion.
Included in the capital receipt is a brought forward balance of N175 billion which comprise of proceeds from 2019 loan and bond issuance of N100 billion and N75 billion respectively.
Sam Egube, the state commissioner for economic planning and budget, who gave the analysis of the 2020 budget on Tuesday, alongside Rabiu Olowo, finance commissioner; Gbenga Omotosho, information commissioner, among other cabinet members, said that a deficit of N97.533 billion in the budget is projected to be funded by a combination of internal and external loans.
The government’s projected huge IGR is fueled by the belief that several taxable individuals and businesses in the state have not been captured in the tax net.
“A significant percentage of the projected total revenue of N500 billion is expected to be contributed by LIRS. We shall achieve this by expanding the tax net through the deployment of technology, among other initiatives, which includes massive investments in technology and other facilities to improve the efficiency in operations of all revenue generating agencies.
We believe that there are huge revenue generating opportunities in the informal sector, including real estates, transportation for which Lagos State is known for,” said Egube.
A further breakdown of the budget proposal by sectors shows education allocated N136.100 billion; transportation, N117.248 billion; health, N111.775 billion; environment, N66.586; security and governance, N39.265 billion; tourism, N7.481 billion; sports, N7.740 billion; housing, N48.559 billion; agriculture, N4.840 billion; while youth & social development, was allocated N3.716 billion.
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