COVID-19: Lagos state reduces 2020 budget by 21%

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The Lagos state government has approved a reduction of the 2020 Budget by 21 percent.

The State’s Commissioner for Economic Planning and Budget, Mr Sam Egube, who made this known at a press briefing explained that this was to help mitigate the economic fallout precipitated by the Coronavirus pandemic.

He said that the budget would be reduced to N920.5 billion against N1,168.6 trillion, hitherto approved by the State House of Assembly.

The Commissioner listed some of the factors that necessitated the review of the 2020 Budget to include: fall in crude oil prices, downward pressure of Internally Generated Revenue and devaluation of the Naira.

He added that reduced public and private investment, increased inflation, decline in demand for goods and services and reduction in manufacturing activities portended increased unemployment and lower the Gross Domestic Product growth.

Egube said that part of the state’s holistic approach to the pandemic already adopted by the state government included, maintaining a strong response, restarting the state’s economy.

“To restart the economy, we are going to optimise the state’s budget for investments in jobs and priority sectors through jobs creation, economic stabilisation and fiscal consolidation.

“While to re-imagine the state economy, we will prepare the state to operate and thrive within the new reality with digitisation, business environment reforms and economic diversification,” the Commissioner added.

He gave the breakdown of the budget as follows: the total budget size is reduced by 21 per cent from N1,168.6 trillion to N920.5 billion with the financing deficit increasing slightly by 11 per cent from N97.5 billion to N108.1 billion.

Recurrent expenditure (Debt and Non-Debt) declined by 10 per cent from the initial N457.5 billion to N411.61 billion and total capital expenditure reduced by 28 per cent from N711.033 billion to N508.9 billion.

The revised total revenue, according to Egube, represented a drop of 24 percent from the projected N1,107.03 billion to N812.5 billion.

It would be recalled that the Lagos Assembly passed N1.169 trillion as the 2020 Appropriation Bill for the state.

The approved budget contained N457 billion recurrent expenditure and capital of N711 billion, showing a strong preference for capital projects by 60 percent.

Peace PIAK

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