By Modupe Gbadeyanka
Last month, the Lagos State Governor, Mr Babajide Sanwo-Olu, signed the 2021 budget into law. He said his administration intends to spend a total of N1.164 trillion in the current fiscal year.
From the N1.164 trillion projected to be spent in 2021, Mr Sanwo-Olu had said N971.02 billion would be sourced from three components; N723.81 billion from Internally Generated Revenue (IGR), N71.81 billion from capital receipts, and N175.40 billion from federal transfer.
Business Post gathered that the N193 billion deficit from the budget would be sourced from borrowings, with N100 billion to be sourced from the capital market, N52 billion ($137 million using an exchange rate of N379/$1) from external sources and N41 billion from internal sources.
The Commissioner for Finance, Mr Rabiu Olowo, during a chat with newsmen in Lagos on Thursday, disclosed that the N100 billion would be raised from the sale of bonds to investors at the nation’s capital market.
This government debt instrument would come in form of a revenue bond and would be used solely for the financing of critical infrastructure and development projects in the metropolis.
Mr Olowo, at the facts-behind-the-figures media budget presentation yesterday, explained that the administration was focused on embarking of projects that would boost the economy of the state.
Last year, several properties belonging to the government and private individuals were destroyed after a peaceful protest by youths calling for an end to police brutality was hijacked by hoodlums.
Lagos was almost completely destroyed and the Governor said a huge amount of money would be needed to rebuild the commercial capital of Nigeria because of the level of the destruction.
This may have informed the decision of Mr Sanwo-Olu to pay more attention to capital projects in the 2021 budget as 60 per cent of the appropriation bill was allocated for capital expenditures, while 40 per cent was earmarked for recurrent expenditures.
With this, out of the N1.164 trillion it plans to spend in the 2021 financial year, the Lagos State government has proposed to use N702.93 billion for capital projects, while N460.58 billion would be used to pay salaries and others.
The Commissioner of Economic Planning and Budget, Mr Sam Egube, while also speaking at the event on Thursday, expressed optimism that the state government would meet its budget target because, in 2020, it achieved a performance of 86 per cent and a revenue generation of 93 per cent.
Recall that last year, the Lagos State government sold bonds worth N100 billion to investors in the capital market for capital projects in the metropolis.
