The Commissioner for Economic Planning and Budget in Lagos, Sam Egube, disclosed this on Thursday, May 21.
He said that the review, approved by the State Executive Council, is aimed at reducing the N1.168 trillion budget approved by the Lagos State House of Assembly to N920.5 billion. Egube said the initial budget figure contained a capital expenditure of N711 billion and N457 billion recurrent budget, showing a strong preference of 60 per cent ratio for capital projects.
He revealed that the first quarter of 2020 recorded a budget performance of 56 per cent (N163.28 billion), which was higher than the 68 per cent (N148.38 billion) recorded for the same period in 2019
According to him, the strong pandemic response will enable the state government to engender food security and safety net mechanisms, in addition to economic stimulus.
“To restart the economy, we are going to optimise the state’s budget for investments in jobs and priority sectors through job creation, economic stabilisation, and fiscal consolidation. In reimagining the state economy, we will prepare the state to operate and thrive within the new reality with digitisation, business environment reforms, improved economy and diversification of revenue sources.”
The commissioner pointed out the negative effect of the fall in crude oil prices on statutory allocation expectations, the downward pressure on Internally Generated Revenue (IGR), devaluation of the naira, reduced public and private investment and increased inflation rate as reasons for the overhaul of the projected figures of the 2020 budget.
He listed other factors to include the decline in demand for goods and services, as well as a reduction in manufacturing activities which he said indicated lower GDP growth and increased unemployment.
Egube explained that Lagos has adopted a holistic approach to the shocks induced by COVID-19, adding that the strategies included the maintenance of a strong pandemic response, restarting the economy, and reimagining the way the state has been operating.