In moves aimed at mitigating the economic and social headwind precipitated by the coronavirus pandemic, The Lagos State Executive Council has approved a review of the state’s 2020 budget by 21 percent.
This was disclosed by the State Commissioner for Economic Planning and Budget, Mr. Sam Egube, during a press briefing on Thursday in Lagos.
He said the budget would be reduced to N920.5 billion against the previously appropriated N1, 168.6 trillion, hitherto approved by the State House of Assembly.
Giving a breakdown of the revised budget, Egube said, “The total budget size is reduced by 21 percent from N1, 168.6 trillion to N920.5 billion with the financing deficit-increasing slightly by 11 percent from N97.5 billion to N108.1 billion.
Recurrent expenditure (Debt and Non-Debt) declined by 10 percent from the initial N457.5 billion to N411.61 billion and total capital expenditure reduced by 28 percent from N711.033 billion to N508.9 billion.
The revised total revenue represents a drop of 24 percent from the projected N1, 107.03 billion to N812.5 billion” he said
The commissioner stated that the downward review of the budget became imperative in the face of falling crude oil prices with damaging effects on statutory allocation expectations, downward pressure of the Internally Generated Revenue, IGR, and devaluation of the Naira.
He added that reduced public and private investment, increased inflation, a decline in demand for goods and services, and a reduction in manufacturing activities portended increased unemployment and lower GDP growth.
Egube said part of the state’s holistic approach to COVID-19 shock already adopted by the state government included maintaining a strong pandemic response, restarting the state economy, and re-imagining the way of the state’s operations.
“To restart the economy, we are going to optimize the state’s budget for investments in jobs and priority sectors through job creation, economic stabilization, and fiscal consolidation. While to reinvent the state economy, we will prepare the state to operate and thrive within the new reality with digitization, business environment reforms, and economic diversification,” the commissioner added.