Lagos, Nigeria’s financial capital and economic power house, may be presenting an ambitious N1.1 trillion budget for 2018, a source in the state’s ministry of finance hinted to BusinessDay over the weekend.
The proposed sum which, according to our source, will tilt in favour of capital expenditure would be the first time a sub-national budget will hit the trillion naira mark in Nigeria.
The highest seen so far was N813 billion, incidentally, by Lagos in 2017. In 2016, the state budgeted a sum of N662.588 billion. The next to Lagos in 2017 was N470 billion by Rivers State while Kano, the second largest state in the country by population budgeted N209 billion this year.
The fall in international oil prices has seen many Nigerian states struggling to balance the budget in the last two years as allocation from the Federation Account nosedived, with most states unable to meet up their financial obligations to workers and contractors.
Aside Lagos which funds about 75 percent of its annual budget from Internally Generated Revenue (IGR) and loans most other states rely on monthly allocation from Abuja.
BusinessDay gathered that transportation, energy and environment will be the priority areas for Lagos in 2018.
Lagos in Lagos, a booming metropolis of around 20 million people has 40 per cent of all bank branch network in the nation, and generates about 50 per cent of the country’s Value Added Tax , it also handles some 70 per cent of the total national cargo and is the Aviation Hub of Nigeria with 82 per cent of all International flights and 50 per cent of domestic ones.
Lagos makes up 20 percent of Nigerian GDP and 40 percent of non-oil GDP.
Already, the state government has begun bilateral discussions with Ministries, Departments and Agencies (MDAs) on their input into the state’s 2018 budget.
Submission and defence of input into the budget by the MDAs which commenced November 1, is expected to be rounded off on November 8, 2017.
The interaction is being chaired by Akinyemi Ashade, who doubles as commissioner for Finance, Budget and Economic Planning.
A circular signed by Abayomi Kadri, Permanent Secretary, Ministry of Economic Planning, had recently directed a series of financial management reforms with emphasis on IGR in view of the falling revenues accruing to the state from the Federation Account.
The state expects that increase in revenue will aid efficient and effective service delivery by the MDAs as well as sustain developmental programmes, projects and structures already put in place by the present administration.
Kadri explained in the circular that the overarching policy documents that drive the annual budget still remained Lagos State Development Plan (LSDP) and Sustainable Development Goals (SDG).
He, however, noted that environment, transportation and energy are priority areas for the 2018 budget.
He said the government would maintain the established international standard of nine Classification of Functions of Government (COFOG) with a view to engender effective tracking of the budget, and also ensure that a robust and critical evaluation of programmes and projects is adopted in order to add value to the well-being of the citizens.