Lagos Generates N436bn in 2016, Seeks N100bn from Capital Market

Rakes in N3.99 billion from land use charge
Gboyega Akinsanmi
The Lagos State Government on Monday said it raked in N436.328 billion in 2016 as internal revenue, about 10 per cent more than what it generated in 2015.

Consistent with its 2017 Appropriation Act, the state government said it would soon approach the capital market to raise N100 billion from the N500 billion bond programme it initiated in December 2016.

The State Commissioner for Finance, Mr. Akinyemi Ashade, gave the figure at a news conference he addressed at Alausa on Monday alongside his Information and Strategy counterpart, Mr. Steve Ayorinde, and the state’s Accountant-General, Mrs. Abimbola Umar, among others.

At the conference, Ashade said the sum of N436.328 billion the administration of Governor Akinwunmi Ambode generated in 2016 exceeded what was generated in 2015.

In 2016, Ashade said the existing strategic financial management framework of the state’s resources was steadfastly sustained and this resulted in steady improvement of the state’s revenue.
He noted that total revenue of N436.328 billion “was realised in the 2016 compared to N399.382 billion in 2015. In relative terms, the revenue performance was N36.946 billion more when compared with the year 2015.“Total Internally Generated Revenue for the year 2016 was N312.820 billion which represents 75 per cent of the projection and 72 per cent of total revenue, compared with N247.946 billion, representing 80 percent of the projection and 69 per cent of total revenue for 2015.”

Ashade added that the Lagos State Internal Revenue Service (LIRS) revenue for 2016 was put at N247.022 billion, representing 80 percent of the estimate, 79 per cent of total IGR and 57 per cent of total revenue.
When compared with 2015, Ashade said the state generated N225.041 billion, which he said, represented 81 per cent of the estimate, 79 per cent of IGR and 56 per cent of total revenue for the year 2015.

Speaking on the state’s land use charge (LUC), Ashade explained the dynamism the state had brought into the expansion of land use charge in the last one year, noting that more payment channels were introduced to cater for the large number of people that needed to pay the charge.

In some cases, he banks were encouraged to establish their presence at tax and revenue centres, including LUC centres to reduce incidence of cash transaction and attendant frauds that might arose.
He said the innovations and public awareness campaigns adopted by government had drastically increased the state’s LUC revenue generation from N6.156 billion in 2015 to N7.156 billion in 2016, disclosing that in the first quarter of 2017, LUC collections stood N3.99 billion.

However, Ashade said the LUC Assessment Appeal Tribunal, which he said the state government set up to address diverse issues that might arise, would continue “to give opportunity to the public to resolve LUC issues by mediation instead of going to regular courts.

“In the year under review, the tribunal treated over 500 cases. 195 of those cases were resolved amicably and payments made immediately by the property owners, while the others which involved minor amendments to the bills were also resolved amicably,” he explained.

On the Lagos State Bond Issuance Programme, the commissioner explained that the state government had continued “to utilise the domestic capital markets to raise funds in line with its vision of using sustainable budgetary deficit arrangements to grow the state’s GDP.

“In line with our medium to long term finance strategy, the N500 billion bond programme was established in December 2016 with the N47 billion bond being its first tranche raised from the capital market.
“We are at an advanced stage in line with the 2017 appropriation law to approach the capital market for issuance of N100 billion bond in series 11 through book building subject to regular provisions.

“While the state government is pursuing the N500 billion bond programmes, it has continued to ensure a strong and healthy debt sustainability regime leading to improved local and international ratings for the state and its debt instruments. In February 2017, Fitch Ratings (an international ratings agency) affirmed the long-term national rating at “AA+” with a stable outlook.

“Sequel to the approval of Development Policy Operation (DPO) III by the Federal Executive Council and in compliance with conditions precedent to draw down; the World Bank approved the disbursement of the third tranche of $200 million facility in April 2016 to the state.
“The state government has been servicing its external debt consistently with the Debt Management Office (DMO) in Abuja, deducting at source from the state government statutory allocation to effect repayment of both local and foreign loans,” the governor explained.