Expectations From The 2022 Lagos Budget Of Consolidation – By Ayo Oyoze Baje
“The Y2022 budget, which we have christened the “Budget of Consolidation” is a landmark budget in the history of the state both in its size and texture. The approved Y2022 Budget of ₦1.758 trillion made up of ₦1.167 trillion Capital Expenditure and ₦591.281billion Recurrent Expenditure, resulting in a Capital-to-Recurrent ratio of 66:34, is strongly in favour of Capital Expenditure”
-Gov. Babajide Sanwo-Olu of Lagos State
According to Barack Obama, former President of the United States: “A budget is more than just a series of numbers on a page; it is an embodiment of our values.” With this as the propelling policy principle, yours truly, an unrepentant advocate of holistic restructuring of Nigeria, buoyed with true fiscal federalism decided to take a critical look at the 2022 Lagos State Budget.
In the course of that, one could not but marvel at the immense potentials of the economic gains that would have accrued to the good people of Lagos state-indigenes and residents alike- if it was on its own to control its resources, as a powerful federating unit.
Beyond sentiments, one’s excitement is hinged on the budget’s realistic approach to the various sectors of the economy; with its frontal focus on infrastructural development, more so on food security, education and healthcare delivery. That the allocations fall in tandem with the current harsh economic situation in the country is commendable. What with an ever-soaring inflation rate( affecting prices of food items, housing, transportation) which the respected economist, Bismarck Rewane, chief executive officer of Financial Derivatives company, says will remain structurally high at a full-year average of 13.3 percent!
So, the million-Naira questions that readily come to mind include the impact the figures would have on the populace, if properly implemented and if the expected revenue generation will sustain them. Coming at a pre-election year, which is usually characterized by the chasing of the dark shadows of politicking at the expense of the substance of sustainable, people-friendly governance, will the performance give adequate value for the money so earmarked? Time will tell.
Another fascinating feature of the budget has to do with the thorough thinking through process; with meaningful inputs from the Ministries, Departments and Agencies (MDAs). It would be recalled that a proposed Y2022 Appropriation Bill of N1.388 trillion was presented by the state governor, Babajide Sanwo-Olu to the Lagos State House of Assembly for consideration and assent on November 24, 2021. It was subsequently passed as an amended Bill of ₦1.758 trillion by the State House of Assembly on December 29, 2021. Good enough, it has since been signed into law by the governor. Let us take a closer look at the nitty-gritties.
In specific terms, the budget targets ₦1.237 trillion revenue as well as a combination of internal, external loans and bond issuance to finance ₦521.275 billion deficit. This is at 21 per cent of debt service-to-total-revenue of the state. The Lagos Inland Revenue Service (LIRS) is expected to generate 73.5 per cent of budget revenue.
On massive infrastructural development issues, the Commissioner for Economic Planning and Budget, Sam Egube noted that: “We have increased our investment in infrastructure by 86 per cent over the prior year budget to N619 billion, representing 35 per cent of the entire budget size”. Strong and stable infrastructure is essential to statewide economic and social development, he noted and rightly too.
Giving the overview of the year 2022 budget, Egube said that it is consistent with the THEMES agenda and designed to give priority to the completion of the ongoing projects. These include stadia, Special Committee on Rehabilitation of Public Schools (SCRPS), Lekki-Epe Road, Fire equipment, New Massey Children Hospital, Opebi-Mende Link bridge, Lagos-Badagry Expressway expansion project, with N9.9 billion earmarked for completion.
Some of the projects under the contractor- financed programs include: 24km Red line rail from Agbado to Oyingbo (Phase 1) which span 10 bridges/overpasses, 13 pedestrian bridges and 8 train stations. The 13-kilomtre Blue line rail from Mile 2 to Marina with sea crossing (Phase 1) and the 20 km Lagos -Badagry Expressway to Okokomaiko are estimated to gulp N153 billion for the completion of the first phase.
There are cogent reasons given for each set of projects. These include the completion of 8 Stadia across the 5 Ibile Divisions of Lagos state. These are meant to facilitate youth development, engagement and community sports.
The construction of the 6-lane reinforced concrete Lekki-Epe Expressway from Eleko junction to Epe T-junction is a strategic project aimed at accommodating the increasingly huge and heavy vehicular movement in the Lekki Epe axis. Its increasing impact will become visible, especially when the deep seaport and the Dangote refineries come into full operation.
Similarly, the construction of the Opebi Link Bridge to Maryland will significantly improve travel time and alternative route options along the axis. Others include Expanded Drainage construction/rehabilitation/maintenance program, channelization of waterways.
The procurement of 62 fire vehicles will definitely improve fire response service all over Lagos state, by further decentralization of operating locations. It will strengthen the government’s emergency response capability.
On healthcare matters, the construction of 130- bed New Massey ultra-modern general hospital is to be made as a fit- for -purpose programmed pediatric centre. It is to also to take care of emergency situations. It will be the largest specialist children hospital in sub- Saharan Africa. Great, isn’t it? Yes, of course.
The human capital development and social interventions are meant to enhance the wellbeing of a population that is healthy, skilled and inclusive. That perhaps, explains why the Y2022 budget increased the allocation to the education family by 25 per cent to N173billion, representing 10 per cent of the budget size. This tilts it towards the UNESCO recommendation of 26 %. The proposed construction and rehabilitation of schools across the state will also significantly improve access to quality education.
On food security, which is getting more critical, the government has continued to provide support to farmers, create food banks and improve food systems generally. In this regard, the government increased the budget on agriculture by 34 per cent to N27 billion in Y2022. With this the government intends to complete the Imota Rice Mill, which when completed will have a capacity to produce 2.6 million, 50 kilogramme bags of rice per annum. It will also employ over 350,000 people both directly and indirectly. Of significance too is that the government will be training and empowering over 40,000 women and youth in agric business. This is both proactive and humane in nature.
On technology, Lagos intends to be the technology hub for Africa; a major incubation and acceleration destination for technology solutions. It has provided an increase in technology investment of 27 per cent over the Y2021 budget to N30 billion. This will definitely strengthen the intelligence gathering/capacity-building capabilities together with improving the ease of doing business through the SmartCity project, the Lagos New Data Centre project, Eko Excel project and the Oracle upgrade project.
This is getting more intellectually engaging and making a lot of economic sense, as Rachel Cruze rightly noted that: “A budget doesn’t limit your freedom; it gives you freedom.”
Taking an overview of the budget one is intrigued by the factor of Trust. Over the years the government has kept its pledge to be people-oriented. The process is to ensure that every effort, investment, partnership and policy translates maximally into noticeable positive impact on the lives of the people. All these are exemplary for other states to take a cue from.
– Baje is a public commentator and analyst