Ambode proposes N1.046tn Y2018 budget
..To rehabilitate 181 roads
The proposed Y2018 budget of Lagos state tagged: ‘Budget of Progress and Development’, with a size of N1,046,121,181,680 (N1, 046tn), was on Monday presented to the state’s House of Assembly by the Lagos State Governor Akinwunmi Ambode.
According to the governor, the budget will be used to consolidate on infrastructure, education, transportation/traffic management, security and health with an added emphasis on mandatory capacity building for civil servants, all teachers in public secondary / primary schools, officers in the health service sector, women and youth empowerment, alongside Medium and Small/Micro Size Entrepreneurs (MSMSE’s).
The proposed budget amount represents an increase of 28.67 per cent over Y2017 budget with the following key components: Recurrent Expenditure – N347.039bn, Capital Expenditure – N699.082bn, Capital/Recurrent Ratio – 67:33
According to the governor, “The estimate of total revenue for year 2018 is N897.423billion of which N720.123billion will be generated internally. A total of N148.699billion will be sourced through deficit financing within our medium-term expenditure framework.
“Our investment in new technology and the reforms put in place will galvanize the efficiency of our revenue collection from our citizens. The highlights of sectoral allocation for Y2018 include; General Public Services N171.623billion, Public Order and Safety N46.612billion, Economic Affairs N473.86billion, Environmental Protection N54.582billion, Housing and Community Amenities N59.904billion, Health N92.676bn
Recreation, Culture and Religion N12.511bn, Education N126.302bn, Social Protection N8.042bn.”
He stressed that the Y2017 had been quite challenging due largely to the recession that hit the nation’s economy.
He said, “To get a clear picture of the economic challenges that have confronted our government, it is necessary to restate some important indicators. Crude oil prices have been dwindling from $US100.40 in 2014, $US 52.65 in 2015, $US43.81in 2016 to $US46.39 in 2017.
Exchange rate increased from N156.44 in 2014 to N305.24 in 2017. The impact of this has been a sharp reduction in the inflow from the (Federal Government) Federation Account and a huge increase in the cost of project delivery.”
He said despite this situation, his government had been able to initiate and deliver more high quality and high impact projects; more than ever before. He said this was achieved using a mix of astute financial management and prudency; increasing internally generated revenues, adequate allocation of resources across all sectors and an all-inclusive governance approach.
He reiterated that it was significant to note that his administration had not contracted any new external loan to fund projects since his assumption of office. “We have only completed transactions which were already in place before we assumed office.
“ This administration inherited external loans from various past administrations which make up 60 per cent of all our loans. This figure is made up of some loans that have been running since 1989, about 30 years ago, and were contracted at an average of N80 to $US1. Today, these loans are being repaid at an average rate of N305 to $US1 translating to 205 per cent increase in the loan repayment rate.
“The state has incurred huge exchange losses on its external loans in this year 2017. The exchange loss represent 35 per cent of the state external loans stock due to exchange rate slump of the Naira from N197.50 to $1 to N305 to $1. This is one of the side effects of an economy in recession.
“Irrespective of these losses, it will be inappropriate to say that Lagos state has a high debt burden when situated with the level of development and infrastructural growth enjoyed presently by the state. We are certain that the loans have continually been used for the wellbeing of all Lagosians.
“Despite the additional burden arising from devaluation of the Naira, our debt service ratio remains very strong on the back of our impressive revenue performance. The state’s net debt stock of N874.38bn represents just about 3 per cent of the state GDP, while the sebt service charge to Revenue ratio stood at 15.61 per cent compared to 13.32 per cent in 2016 and 12.45 per cent in 2015. I am proud to report to you that, today, your state remains financially strong and the most vibrant economy in the Nigerian landspace,” governor Ambode said.
He equally noted that the state average contribution to the National Gross Domestic Product (GDP) from 2015-2017 remains strong at about 30 per cent.
“It is our resolve in Y2018 to strive and complete all on-going projects in order to meet their specified completion period and embark on new strategic projects. We intend to improve on our Internally Generated Revenue (IGR), in the face of the dwindling accruable revenue allocation from the Federal Government, sustain our vision on wealth creation and poverty alleviation. As we commence our Cleaner Lagos Initiative Programme, I strongly appeal to all citizens to embrace the Public Utility Levy that will commence in January 2018 for a cleaner, healthier Lagos,” he said.
The governor said it was his desire to maintain the tempo of continuous construction, rehabilitation, upgrading and maintenance of network of roads throughout the length and breadth of the state including those within the boundaries of Lagos and Ogun states.
“With the favourable weather conditions prevailing now, this year’s local government roads totaling 181 will be commenced as contractors will be mobilized immediately.
“We have made provisions for continuous gridlock resolution, junction improvement, construction of more laybys and advancement of signalization that will improve traffic congestion especially along the Lekki-Epe corridor.
“Other key projects that we have provided for include: The Agege Pen Cinema flyover, alternative routes through Oke-Ira in Eti-Osa to Epe-Lekki expressway, the 8km regional road to serve as alternative route to connect Victoria Garden City (VGC), with Freedom Road in Lekki Phase I.
“Completion of the on-going reconstruction of Oshodi International Airport Road into a 10-lane road and the BRT Lane from Oshodi to Abule-Egba. We will consolidate on the Lagos bus reform project with the introduction of high and medium capacity buses, construction and completion of bus depots at Oshodi, Anthony, Yaba and many more,” he said.
Governor Ambode added that in the area of job creation, there will be construct an ICT Focus Incubator Centre in Yaba while the development of Imota and Igbonla Light Industrial Park as well as the provision of additional small scale industrial estate at Shala will commence. He said the State Employment Trust Fund will disburse more funds to Lagosians to support business and stimulate the economy.
“The success of the proposed 2018 budget will rest on our commitment to succeed, drive to be self -sustaining and accelerate growth in both infrastructural and economic reforms, through revenue enhancement especially on fiscalization of consumption taxes, re-enactment of Land Use Law and implementation of physical planning regulations amongst others. As a result, we all have a huge responsibility at ensuring that the 2018 budgetary estimates become a reality as we take another giant stride in the history of our sustainable fiscal responsibilities,” he concluded.
Benjamin Omoike
