LASG Reviews 2021 Budget; Builds on the T.H.E.M.E Agenda

Tuesday, December 01, 2020 / 2:37 PM / Ayomide Oguntoyefor WebTV / Header Image Credit: National Insight News

Asthe Lagos State Government (LASG) prepares for the 2021 fiscal year, members of thestate executive council recently had a web-based virtual conference to explain the structureof the budget and its design around the states T.H.E.M.E.S agenda, crafted as a policy-focused acronym by the Babajide Sanwo-Olu-led administration.

Tokick off the meeting the Commissioner of Economic Planning and Budgeting, Mr. Sam Egube, highlighted the keypoints of the agenda to include;

The state of traffic congestion in Lagos State
The state of theHealth Sector and Environment
Education andTechnology
The state of Securityin Lagos State
The EntertainmentIndustry

Speakingfurther he stressed that the 2021 budget, which he referred to as "A Budget Of Rekindled Hope" summed up the challenge posed by the COVID-19 pandemic in March and the adverse effect of the #EndSarsprotestsin October 2020. He mentioned the fact that the administration was focused on youthemployment with the additional objectives of:

Building impactfulpartnerships with the 3 tiers of government
Attracting private investments
Allowing civic engagement andparticipation in governance, leveraging on technology.
Developing, upgrading and maintaining the State's infrastructure, as well asimprove capacity to generate revenue.

Accordingto the Commissioner one of the key thrusts of the 2021 fiscal year strategy was to create a youth-driven economy in Lagos State.

Onhis part the Commissioner of Finance, Dr. Rabiu Olowo, said that the 2021 budget was an opportunity tore-examine and reshape the fiscal model to improve engagement and impact.

Henoted that the ministry of finance was a web that spreads across various ministries, departments andagencies with a focus onrevenue management, investment management, reporting and compliance.

Reviewing revenue this year,the Commissioner said that with a target revenue at 96% this year, the ministryhas been able to successfully restructure all existing internal loans from 20%to 12% withaDebt Sustainability ratio of 22% and a benchmark of 40%.

Dr.Fredric Oladeinde, Commissioner of Transportation also contributing to thesession, described transportation as the engine of any economy and the mostcomplex and yet one of the most important aspects of an economy's growth. He said that thevision for Lagos State is to develop an Integrated Model Transport System.

Withabout 22 million people in the State, Oladeinde noted that the State recordsabout 24 million trips per day and it is projected to record more than this in the coming years.

Withabout 95% of the trips made on road, he said that there is a need fordiversification and the plan is to make Lagos State a smart city and as aresult, create a robust and integrated public transport system.

Hementioned that the strategic master plan which includes 7 rail Lines, 14 BRTbuses and 26 water routes is projected to last for 20 years. Dr Oladeinde also mentioned other modalities to consider which include:

A ticketing system tobe used for all modes of transportation
Credible informationabout all modes of transport
Inclusion of alllocation in Lagos State

Healso reviewed the effort of theadministration in traffic management. He mentioned that the State's network which wasinitially developed for a population of about 3.5 million people now caters forabout 22 million people resulting in bottlenecks. However, the administrationhas been able to work on Allen Avenue, Abraham Adesanya down to LekkiPhase 1 and 2.

Mrs.Folashade Adefisayo, the Commissioner for Education in her review, said thatthe ministry is saddled with a huge responsibility that caters for all otherministries. She mentioned that the ministry is faced with issues like theequity issue, funding, lack of personnel etc.

She, however, mentioned that theMinistry was looking forward topartnerships and collaborations with other ministries. The ministry also sought to upgrade thestandards of public schools inthe state with a major focus on technology.

Alsospeakingat the review session, Mrs. Abisola Adefisayo, the State's Commissioner of Agriculture, said thatthe contribution of Agriculture to the State over the years, has been low and the sector's overall contribution to the country's GDP was about 21%. Withregards to employment generation, she noted that Agriculture contributed 70% to jobs in the countrywithmost people living in ruralcommunities.

Shehighlighted the strategic objectives of the Agric Ministry which involves four (4) key areas;

Focus on value chain
Wholesomeness of foodproduce
Increment in foodsufficiency level
The informal sectors with regards togenerating revenue.

LagosState Total Revenue (N'bn) 2019

TheMinistry, according to her, also looked forward totransforming the market to harness every opportunity available, with proper infrastructure to ensurefood security. T.H.E.M.E.S represents Traffic Management and Transportation;Health and Environment, Education and Technology; Making Lagos a 21^st Centurystate; Security and Governance. According to Adefisayo "we are looking forward to creating anenviable market structure, not just as a means for purchases but also as ameans of agro-tourism" she noted.

Proshare Nigeria Pvt. Ltd.

The ministry also looks forward tocreating an enviable market structure, not just as a means for purchases butalso as a means of agro-tourism.

Analysts at the session raised a wide varietyof issues ranging from the apparent absence of a clear cut policy thataddresses the huge potential in Lagos's blue economy and the largeopportunities that could exist in a night economy similar to that of Dubai inthe United Arab Emirates (UAE). It was noted that there were some concernsabout the states rising debt profile and a COVID-19-induced pullback in revenueas taxes such as value added tax (VAT) was likely to fall behind projections inthe year as a result of the virus pandemic and the economic disruptions andcommercial losses suffered during the EndSARS campaign in October with Lagos asthe epicentre of youth agitations.

Lagos StateIGR (N'bn) 2019

The government clearly, according toprivate sector reviewers of the state's 2021 budget, has a lot of fiscalrejuggling to do to sustain expansion of its capital expenditure in the comingyear 2021. In addition a lot of work would need to go into restoring confidence in the state's security architecture and its businessfriendliness for fresh investor funds to flow into the many sectors that mayrequire patient private capital.

Nevertheless, the T.H.E.M.E agenda ifmethodically and clinically executed may pivot the state's GDP growthtrajectory towards a more inspiring rate of between +5.02 and 6.03%. This would contrast markedlywith the -3.62%nationalgrowth rate in October 2020 and the -1.96% that some analysts have forecast forQ4 2020.