…Evolves New Budget Financing Approach to Reliance on Federal Allocation

By Gboyega Akinsanmi
 

In a conscious move to reduce its dependence on federal allocation to zero percent, the Lagos State Government yesterday disclosed that it had already evolved new budget financing approach aimed at making it financially independent by 2019. 

Likewise, a renowned political economist and financial expert, Prof. Pat Utomi emphasised the centrality of Lagos to Nigeria’s domestic economy, noting that the state “is a crucial catalyst if Nigeria’s economy is to witness a major turnaround for the better.”

 The state government expressed its resolve to finally discard the traditional methods of budget financing in a communiqué it issued at a three-day Executive/Legislative retreat held at Eko Hotels and Suites, Victoria Island and under a theme, ‘Good Governance in a Recession.’

The retreat was attended by all members of the State Executive Council (SEC) and lawmakers representing different constituencies in the state at the Senate, House of Representatives and the House of Assembly.

The communiqué, which was read by a lawmaker representing Lagos West Senatorial District, Senator Olamilekan Solomon Adeola, emphasised the need “to evolve a better approach of financing the state’s budget as against the traditional methods.”

The communiqué, also, highlighted the need to drastically reduce dependence on federal allocations; increase internally generated revenue (IGR) and target an annual budget size of at least N1 trillion by 2019.

It said all participants at the retreat, which was chaired by the state governor, Mr. Akinwunmi Ambode, insisted that it was compelling for the state “to redouble efforts towards reducing the dependence on federal allocation and increasing the IGR.”

It, therefore, endorsed the proposal of the Ambode administration “to increase the IGR to a target of N30 billion monthly in 2017 and N50billion monthly in 2018,” which it sought to achieve through expanding tax’s net rather imposing new levies, rates and taxes.

 The communiqué emphasised the strategic increase in its IGR annually if it would meet its target of annual budget size of N1trillion, which it said, would come on stream by 2019.

The communique said participants also recognised the role of government as an ‘enabler’ “to create frameworks and strategies to further accelerate the growth of the state’s economy.”

It said participants reaffirmed Ambode’s vision “to make life better and more meaningful for the people of Lagos and also enshrine the doctrine of ‘inclusive governance’ in the government of the state and foster collaboration amongst the three arms of government.”

It added that participants agreed “to encourage private investments towards accelerating growth in the tourism and hospitality sector for sustainable job creation and increased revenue generation.”

It stressed the need “to accelerate infrastructure improvement in the state with emphasis on integrated transportation system and sustainable solid waste management system by overhauling and rebranding the sectors in collaboration with the private sector.”

In a presentation he made at the three-day executive/legislative retreat, Utomi spoke on the centrality of Lagos State to Nigeria’s domestic economy, saying there were a lot of lessons to be learnt from Lagos economy in order to rescue Nigeria from economic recession.

The political economist explained what distinguished Lagos from other states, citing that its economy “is largely driven by its huge investment in infrastructure, vibrant tax collection strategy and an enabling environment for businesses to thrive with less dependence on oil revenue.”

Utomi cited an example of “Adams Oshiomhole after emerging the governor of Edo State. He needed to learn how Lagos was getting it right and then replicate same in Edo. The first thing Oshiomhole did was to say he needed to learn how Lagos was getting it right.

“Oshiomhole came to Lagos with his core team to understudy Lagos development model. We can see how that worked well in Edo. Other states also emulated how the tax and IGR template works in Lagos and how the public service is structured in a way that there is good coordination.”

Utomi, therefore, prescribed the Lagos example for other states of the federation and Nigeria as a whole, emphasising that the momentum would be good for the country.

He, also, canvassed for the South-west states “to scale up its economic integration. This is why I have always advocated for a Lagos-Ibadan megalopolis. Lagos is already a mega city by virtue of its population, but a deliberate economic integration with other South-west states can produce even better results.

“This will not be a new template in any way. In fact, it will be taking us back to the template of the old federal structure in a way, when the three regions had a healthy competitive spirit that brought about real development,” the political economist explained.

Aside its resolve to reduce dependence on federal allocation indicated in a communique it issued after the retreat yesterday, the state government said it would unveil a robust youth policy that would include active private sector partnership and fast-track a senior citizens’ policy, which it said, would be implemented from January 2017.

Likewise, the state government said there was need to upgrade the quality of schools through training and re-training of teachers, as well as improving the infrastructure.

As contained in the communique, the state government said participants were unanimous in their resolution “to improve the standard of education across the state, particularly in slum areas.”