Ayo Oyoze Baje
Several factors come into play that eventually affect budget predictions and their attendant performance.These include the institution’s current financial situation, available funds and revenue streams or income. Others are the business goals and the outlook for the environment one is operating in.As it is with companies that undertake the budgeting process to commit to a financial action plan, so it is with the federal and state governments in Nigeria and elsewhere.
Essentially, budgets assist them to organize their finances; identify and focus on potentially feasible ventures for investment purpose and avoid committing funds to drain pipes. Budgets are also designed to increase revenue generation. The scenario for Lagos state of Nigeria is therefore, not much different when one narrows it down to the 2020 budget pitched against the prevailing, unpredictable economic situation across the country. It is in the light of this that one considers the N1.168 trillion budget recently signed into Law by Governor Babajide Sanwo-Olu. According to the Commissioner for Budget and Economic Planning, Mr. Sam Egubeits salutary aim is to promote investments in all sectors of the state’s economy. That is in addition to making “meaningful impacts in the lives of the people”.
He also added that the Year 2020 budget tagged: “Budget of Awakening” is aimed at making “Lagos the envy of the world through deliberate efforts to promote investments in all sectors across the state”.The budget is meant to generate internal revenue of N886.041billion while other revenue projections include capital receipts of N232.29billion and Federal transfers of N184.988billion. To facilitate this, the budget will hopefully attract private sector investments by creating an enabling environment and investment in human capital development. It would also improve the capacity to collect revenues as efficiently as possible and build impactful partnerships with the federal government, other state governments and local governments. He said: “This budget has taken into consideration the present economic realities in the World, Nation and Lagos State in particular, as well as the optimism for improvement in our revenue collections. The Y2020 budget will most importantly promote massive investments in Traffic management and Transportation, Health and Environment, Education and Technology, making Lagos a 21st century economy, entertainment, tourism, security and governance.” The sectoral breakdown of the budget stands as follows: Traffic Management and Transportation will take the sum of N44.510billion, while N136.100billion was budgeted for the Education sector, Science and Technology got the sum of N10.629billion, a total sum of N111.775billion was provided for Health, Environment got sum of N66.586billion while N7.481billion was provided for Tourism. For Sport Development, a total of N7.740billion was allocated for the Ministry, Housing and Community Amenities was provided with N48.559billion, N4.840billion was approved for Agriculture and Food Security; and to boost Commerce and Industry in the State, a total of N3.926billion was earmarked for it, Wealth Creation and Employment got N8.403billion, N2.920billion was set aside for Women Affairs, Youth and Social Development got N3.716billion while N39.265billion was allocated for Security and Governance. Good enough that the state earmarked N711.031billion for Capital Expenditure and N457.529bilion for Recurrent Expenditure, making it 61:39 per cent ratio in favour of Capital Expenditure. It is instructive to note that the budget came out after the widely held consultations across the three senatorial districts. That was in addition to taking memoranda and feedback from stakeholders hosted by Honorable Members of the House of Assembly within their respective constituencies. For objective observers of Lagos state affairs, such moves make democracy more meaningful, one must admit.
In all honesty, one is excited about the remarkable ratio of the capital –to- recurrent expenditure framework. This is a far departure from what has been the norm, rather than the exception across not a few states in the country. The increasing infrastructural challenges brought about by the huge influx of all manner of people-Nigerians and other nationals, especially from the West African Sub-Region would inform the wise decision. So are those of the devastating effects of the seasonal floods and of course, the increasing impact of climate change.
Also, the budgetary allocation to Traffic Management and Transportation which is in sync with the Governor Sanwo-Olu’s THEMES Agenda speaks volumes about a leader getting his priorities right. The sheer challenge of the aforementioned population explosion cannot be under-emphasized. Indeed, this brings to the fore, the imperative of the registration of residents with the related certificate.
Similarly, the fact that Wealth Creation and Employment got N8.403billion and N2.920bn was set aside for Women Affairs while Youth and Social Development got N3.716billion are all deserving of commendation.Same goes forCommerce and Industry in the State that got a total of N3.926billion.And so is the sum of N66.586billion budgeted for environment. In fact, the Gov. Sanwo-Olu-led administration’s achievement in that sector should be sustained and upgraded according to the peculiar challenges of the different parts of Lagos. The drawback however, is the budgetary allocation for education, put at N136.100billion whichfalls short of the UNESCO recommendation of 26 %. But making up for this is the additional vote of N10.629 billion for science and technology. This comes as a piece of good news.For a state that has begun driving its operations through information and communication technology, this is commendable.
But more would still have to be done that said,irrespective of the noble intentions inherent in the budget presentation. For instance, there is the critical issueof inaccurate data to work with, especially with regards to the mass of residents engaged in the informal sector.While some of them are outside the tax bracket and others victims of multipletaxation there are the top-notch business ventures that do not remit taxes according to their productive capacities. These factors are significant to the revenue generation of the state.
With the promise that the Year 2020 Budget is to act as a catalyst for investment, no effort should be spared towards providing security, stable electric power and good access roads. Alternative sources of power such as solar, waste recycling and even hydro-power using the Atlantic waves should be encouraged. Private sector participation has therefore, become more significant.
Times have changed indeed, over the past decade, with regards to Lagos state budgets. While the Y2011 budget of N450.775billion was focused on the key sectors of Law and Order; Road and Transportation; Environment; Health; Education; Water; Rural Development; Agriculture and; e-Governance in that order it was a different story in 2015. Under the then state governor, Mr. Babatunde Fashola, out of the budget of N489, 689 billion, the recurrent expenditure got N241, 976 billion and capital expenditure of N247,713 bn. The sectoral allocations showed that Works got the largest chunk of the budget put at followed by Education which stood at N52.209 billion.
For the 2018 budgetof N1.046trillion under Mr. Akinwunmi Ambode, christened “Budget of Progress and Development” it earmarked 67% to Capital Expenditure and 33% for Recurrent. It targeted N720billion Internally Generated Revenue.
Baje writes from Lagos
