By Lukman Olabiyi
Lagos State Government revealed its different strategies to maintain lead as highest contributor to Federal Government Internally Generated Revenue (IGR) and also to improve on the state revenue.
Both the Commissioner for Finance, Rabiu Olowo and the Commissioner for Economic Planning and Budget, Sam Egube revealed the strategies at the ongoing ministerial press briefing to commemorate second year in office of Governor Babajide Sanwo-Olu’s administration.
On current status of Lagos’ account and its debt, Olowo disclosed that realised an IGR of N127 billion in the first quarter of 2021, an increase from the N658 billion realised as at December 2020.
He said the state was able to achieve the feat despite the biting effects of the COVID-19 pandemic because it is proactive in preventing and blocking leakages.
” No institution or organisation is immune to economic sabotage and leakages, but we are proactive enough to predict such sharp practices and prevent them. We are also leveraging on technology to predict and prevent fraud by digitising our processes”, he said.
The commissioner stressed that the state has a good debt profile, with its debt sustainability ratio presently standing at 17.8 per cent, even when regulators put debt ratio at 30 and 40 per cent.
“Lagos’ debt sustainability ratio is currently at 17.8 per cent, though the regulators – World Bank (for guidance) and Federal Ministry of Finance – put the sustainability ratio at 30 and 40 per cent. This tells a lot about our ability to own and manage debts effectively; and as our revenue grows, and we pay our debts, we will continue to take more loans so far they are used to fund capital projects that would ensure the economic success of the people now and in the future.
“Debt is very good, especially for a mega city status that Lagos wants to enjoy. The most important thing is management; and one of the most respected metrics to measure debt management is the debt sustainability ratio; how much debt do you have and how does it compare with the revenue potential, your ability to pay. That is the most important thing for everyone to consider,” he noted.
On how the state was able to contribute N428.98 billion (32.08 per cent) of the N1.3 trillion total IGR generated by states and the Federal Capital Territory (FCT) in 2020, Egube attributed it to Governor Sanwo-Olu proactiveness and doggedness on revenue generation.
According to the April 16, 2021, report by the National Bureau of Statistics (NBS), Lagos the is highest contributor to the federal purse.
Egube said: “This report shows that we are on course. It is a clear proof that the ‘THEMES AGENDA’ of the Governor Babajide Sanwo-Olu-led administration is an operational tool that is correctly aligned to our long-term development plan, and hooked up into our Medium Sector Strategy.”
“The THEMES AGENDA remains strong, and all its elements remain relevant. Even in the heart of the pandemic, the pillars held through. It was like Mr. Governor saw the future, despite the headwinds that came against the pillars, such as health pandemic and the economic downturn, which lead to a revised budget and other tactical maneuvers against the COVID-19 pandemic.”
The commissioner added that the Lagos State Development Plan (LSDP), which encompasses the State Economic Development Policy, and guided by the State Development Plan (2012-2025), has been improved on and expanded to a 30-year Development Plan (2021-2051).
“This new perspective plan is necessary to ‘encourage citizens participation (Build Team Lagos); develop our people to drive productivity and protect the vulnerable (Building our Future); drive Lagos readiness and openness for Business (Building our Economy); optimising relevant infrastructure to support our growth (Building our 21st Century Mega-City) and engaging intergovernmental partnership; all these are aimed at improving the quality of lives of Lagosians.
“The LSDP sits at the apex of the planning and budgetary system of the state. The document provides overall direction for the growth and development of Lagos State. It also provides a framework through which all sectors of the economy can direct their energies and contribute to the improvement of the quality of life of people…”