The Lagos State Executive Council has approved the review of the 2020 Budget by 21 per cent. Commissioner for Economic Planning and Budget, Mr Sam Egube, who disclosed this at a press briefing in Lagos, yesterday, said the reduction was to help mitigate the economic and social headwinds precipitated by COVID-19 on the state.
He said the budget would be reduced to N920.5 billion against the N1.168 trillion approved in the 2020 Appropriation Bill by the State House of Assembly.
Egube said the new review would later be forwarded to the Lagos state House of Assembly for ratifiction.
The approved budget contained N457 billion recurrent expenditure and capital of N711 billion, showing a strong preference for capital projects by 60 per cent.
The commissioner listed some of the factors that necessitated the review of the 2020 budget to include the fall in crude oil prices with deleterious effects on statutory allocation expectations, downward pressure of IGR and the devaluation of the naira. He added that reduced public and private investment, increased inflation, decline in demand for goods and services and reduction in manufacturing activities portended increased unemployment and lower GDP growth.
Egube said that part of the state’s holistic approach to COVID-19 shock already adopted by the state included, the maintenance of a strong pandemic response and restarting the economy.
He explained that with the strong pandemic response, the state government would engender food security and safety net, provide economic stimulus, and ensure the society was run by assuring 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 jobs creation, economic stabilisation and fiscal consolidation. While to re-imagine the state economy, we will prepare the state to operate and thrive within the new reality with digitisation, business environment reforms and economic diversification,” the commissioner said.
He gave the breakdown of the budget to include a total budget size N920.5 billion after a 21 per cent reduction from N1.168.6 trillion and a deficit financing increasing of 11 per cent from N97.5 billion to N108.1 billion. Recurrent expenditure (debt and non-debt) declined by 10 per cent from the initial N457.5 billion to N411.61 billion and total capital expenditure reduced by 28 per cent from N711.033 billion to N508.9 billion. The revised total revenue, according to Egube, represented a drop of 24 per cent from the projected N1,107.03 billion to N812.5 billion.