Lagos State Executive Council has approved a reduction of
the State’s 2020 Budget to N920.5 billion to help mitigate the economic and
social headwinds precipitated by the coronavirus pandemic on the State.
According to the State’s Commissioner for Economic Planning
and Budget, Mr. Sam Egube, the review proposal aims to reduce the Budget to
N920.5 billion as against the amount of ₦1.17 trillion hitherto approved by the
State House of Assembly.
The Lagos State House of Assembly had in December, 2020
passed N1.169 trillion Appropriation Bill for the State.
The approved budget contained N457bn recurrent expenditure
and capital of N711bn showing a strong preference for capital projects at 60%.
Egube informed that the first quarter of 2020 recorded a
budget performance of 56% (₦163.2Bn); which in absolute terms is higher than
the 68% (₦148.3Bn) recorded for the same period in 2019.
The Commissioner listed some of the factors that
necessitated the review of the Y2020 budget to include fall in crude oil prices
with deleterious effects on statutory allocation expectations, downward
pressure of IGR, devaluation of the Naira, reduced public and private
investment, Increased inflation, decline in demand for goods and services and
reduction in manufacturing activities, which portends lower GDP growth and
Increased unemployment.
Egube stated that part of the State’s holistic approach to
the COVID-19 shock already adopted by the state government going forward
included maintaining a Strong Pandemic Response, Restarting the State Economy
and Reimagining the way Lagos State operates
He explained that with the Strong Pandemic Response, the
state government will engender food security and safety net mechanism, economic
stimulus, and ensure public safety and wellbeing.
“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 Reimagine
the State Economy, we will prepare the State to operate and thrive within the
new reality with digitization, business environment reforms, improved economy
and diversification of revenue sources” the Commissioner added.
He gave the proposed breakdown of the revised budget as
follows; the Total Budget Size is reduced by 21% from N1,168.562bn to
N920.469bn with the Financing Deficit increasing slightly by 11% from N97.533bn
to N108.005bn
Recurrent Expenditure (Debt and Non-Debt) declines by 10%
from the initial N457.529bn to N411.608bn and Total Capital Expenditure is
reduced by 28% from N711.033 to N508.861
The revised Total Revenue, according to Egube, represents a
drop of 24% from the projected N1,107,029bn to N812.464bn
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