The Lagos State Government is projecting a 10 percent growth in its Gross Domestic Product (GDP) for 2014 even as it also plans to intensify its revenue generation drive as part of the strategies to implement the 2014 Budget.
The projected percentage GDP growth represents a 3.2 percent increase over the projected GDP growth for Nigeria put at 6.8 percent. It also represents 6.6 percent over the projected GDP growth for the World Economy and 4.7 percent over the projected GDP growth for Emerging Economies.
The state Commissioner for Economic Planning and Budget (MEPB), Mr. Ben Akabueze, who on Tuesday gave a detailed analysis of the 2014 Budget, said the projection was based on the global assumption that the world economy would strengthen this year with sustained growth in developing economies as well as the continued excellent performance of the state’s annual budget.
Addressing journalists at the Bagauda Kaltho Press Centre, Alausa, ikeja, southwest Nigeria, the Commissioner also said Economic Affairs would take the lion share of the Budget with N158.646 billion or 32.40 percent comprising of N137.529 billion for Capital and N21.117 for Recurrent Expenditures.
General Public Service, according to him, comes next with a total of N101 billion or 20.80 percent of the Budget comprising N79.278 billion for Recurrent and N22.558 billion for Capital Expenditures while Education and Housing came third and fourth with N77.424 billion and N50.463 billion respectively, representing 15.81 percent and 10.31 percent of the Budget.
The Commissioner, who said the analysis was aimed at highlighting the deliverables to expect from the Budget, explained that the percentage allocated to function groups reflected government’s priorities adding that the high allocation to Economic Affairs was in line with its Policy Trust on Infrastructure while social sector comprising health, housing and education has also been accorded priority.
He listed deliverables under Economic Affairs to include accelerated food expansion programme including rice production, development of coconut plantation, animal husbandry, expansion of Agric YES project, massive production of asphalt and using same for road rehabilitation and expansion, improved water transportation, holistic shoreline protection (from Kuramo to Alpha Beach), maintenance and upgrading of inner city roads, completion of Lagos Energy Academy training facilities and rehabilitation and maintenance of public buildings among others.
Under General Public Service, Akabueze listed as deliverables the full implementation of public procurement law, human resources reforms, training and development, upgrading of existing public service ICT infrastructure, pensions scheme – sustainability of government state share of contribution and residents registration and Issuance of permanent residents’ cards.
Akabueze, who was supported at the briefing by some members of the state executive council, said of the projected N327.206 billion Internally Generated Revenue (IGR), the state’s Internal Revenue Service (LIRS) is expected to raise N265.860 billion or 67 percent of the total while 37.676 billion and 19.970 billion or 8 percent and 4 percent respectively would come from other agencies and dedicated revenue.
According to the Commissioner, federal transfers amounting to N139.300 billion, would comprise of statutory allocation N74 billion, Value Added Tax (VAT) N65 billion, and Extra Ordinary Revenue N0.300 billion while capital receipts is projected at N23.1984 billion.
This year’s total capital receipts put at 23.184 billion, the Commissioner said, would come from grants, Office of Public Private Partnership (PPP), LAMATA (Transport Fund), Ministries of Housing, Waterfront Infrastructure Development and Physical and Urban Development as well as New Town Development Authority, Lagos Mortgage Board and Land Bureau.
On the planned implementation strategies for the 2014 Budget, the Commissioner said there would be intensification in the efforts of government to generate revenue pointing out that it was aimed at further reducing the dependence of the state on federation account for the purposes of development through increase in its Internally Generated Revenue (IGR).
He said government would also intensify the tracking of monthly revenue performance of Ministries, Departments and Agencies (MDAs) by MEPB adding that Budget performance would also be monitored through rendering of monthly Expenditure Returns by MDAs.
Other strategies, according to the Commissioner, include “deliberately keeping recurrent expenditure performance below revenue performance and adherence to Capital Expenditure Readiness (CER) checklist to ensure adequate project preparation among others”, monthly and quarterly budget appraisal by the planning units of MDAs to enable MEPB and STO generate accurate and timely reports for performance monitoring and decision making and Excess of Retained/Dedicated Revenue over approved expenditure provision to be paid into Consolidated Revenue Fund (CRF) Account among others.
Appealing to citizens to play their roles including paying their taxes regularly, providing information to security agencies and patronage and protection of public facilities and infrastructure, Akabueze said the 2014 Budget is focused primarily on completion of on-going projects and embarking on only new projects deemed critical among others.
He declared “In spite of the precarious security situation in the country and the unfavourable prevailing fiscal federalism, this administration remains resolutely committed to transforming Lagos State into Africa’s model megacity” adding that government would continue to partner with all stakeholders to achieve improved governance economic growth and social responsibility that characterize modern state/city government.
In response to a question on infrastructure development and housing in the state during the question and answer session, the state Commissioner for Works and Infrastructure, Dr. Obafemi Hamzat, explained that the state government believes in quality in all its infrastructure projects pointing out that all the infrastructure built by the state, including the Lekki Ikoyi Link Bridge, were of world class.
He explained also that the houses being built by the Lagos State Government under the Lagos Home Ownership Scheme (Lagos HOMS) were to be allocated under the state’s Mortgage Scheme while the ones being built by the Lagos State Property Development Corporation (LSDPC) were for sale by the corporation which according to him sources its funds independently from the finance markets.
The Special Adviser on Taxation and Revenue, Mr. Abimbola Sodipo, in response to a question on whether or not the state government is operating a cashless policy in revenue collection, explained that the policy of the state was such that no cash is collected in payment for any of the liabilities or obligations that anyone needs to make to the state except in some areas where it is difficult to get to the bank adding that the maximum anyone could collect at the point is N2,000.
He said in order to make it more convenient for people, government was now exploring the option of e-payment wherein the payee would sit in the comfort of his room and swipe his credit or debit card from wherever and make his necessary payment into whatever kind of tax, charge, fee, levy or service payment that he wants to make from inside of his room.
He explained that the fact that there was a gap in revenue did not mean that the government had stopped prosecuting tax defaulters pointing out that if it had been the case, the state would have been forced into revenue crisis.
Disclosing that some people have been taken to court over tax default, Sodipo said some of the people had opted for an out of court settlement and have paid in their money while government would exercise some patience with the few who have opted to be in court until it gets judgment and then make a public example of them.
The state Commissioner for Finance, Mr. Ayo Gbeleyi, while responding to a question on the state’s bond Issue, said in total, the state carries a bond portfolio of N275 billion adding that the latest tranche of bond was N87.5 billion with a tenure of seven years and maturity year of 2020.
He said as regards to the adequacy of funding for the maturing bond, the full principal repayment plus the coupon for the last half of the year would be fully paid in February and is fully provided for in a sinking fund that is currently managed by trustees on behalf of bond holders.
According to him, the state’s current total public debt stock stands at about N435 billion “which is net of N98 billion in Sinking Fund” adding, however, that going by the benchmark of 40 percent as adopted by the Federal Government on public debt, Lagos State is well below it with 13.15 percent as at last year.
Other members of the state executive council at the briefing were: the state Commissioner for Information and Strategy, Mr. Lateef Ibirogba; his Establishment, Training and Pension counterpart, Mrs. Florence Oguntuase; and Special Adviser on Media to the Governor, Mr. Hakeem Bello.