The Lagos State Government has embarked on a downward review of the year 2020 budget, precipitated by the negative economic and social effects of the Coronavirus disease on the global economy.
ROLL Making the disclosure, the Honourable Commissioner for Economic Planning and Budget, Mr. Sam Egube said the process, which was approved by the State Executive Council, aims to reduce the
N1,168.6billion budget approved by the Lagos State House of Assembly to N920.5billion.
Egube recalled that the
N1.169trn for Y2020 contained a capital expenditure of N711billion and N457billion recurrent budget, showing a strong preference of 60% ratio for capital projects. He explained that the first quarter of Y2020 recorded a budget performance of 56% ( N163.28bn), which is in absolute terms higher than the 68% ( N148.38bn) recorded for the same period in 2019.
Outlining some of the factors that necessitated the review of the Y2020 budget, the Commissioner listed the deleterious effects of the fall in crude oil prices on statutory allocation expectations; the downward pressure on Internally Generated Revenue (IGR); devaluation of the Naira; reduced public and private investment; and increased inflation, as reasons for the amendment of the projected figures.
He listed other factors such as the decline in demand for goods and services as well as a reduction in manufacturing activities, which portend lower GDP growth and increased unemployment.
The Commissioner revealed that Lagos has adopted a holistic approach to the shocks induced by COVID-19, saying the strategies include the maintenance of a Strong Pandemic Response, Restarting the Economy and Reimagining the way the State operates.