The Lagos State Governor, Babajide Sanwo-olu, has presented a 2022 budget of N1.388 trillion to the state house of assembly, earmarking huge capital expenditure in the fiscal year to service key growth areas in order to consolidate the recovery of the State’s economy and positively transform residents’ livelihoods.
The governor in the appropriation bill which was presented on Wednesday said the State would be spending N325 billion to deliver vital infrastructure projects in key sectors to energise and expand the growth of the State’s economy.
The budget titled “Budget of Consolidation”, will be the last full-year fiscal plan of the State before the next general election.
The key areas of growth identified by the Governor include Works and Infrastructure, Waterfront Infrastructure Development, Agriculture, Transportation, Energy and Mineral Resources, Tourism, Entertainment and Creative Industry, Commerce and Industry, Wealth Creation and Employment.
There is a projected increase in 2022 in the human capital development drive of the current administration, with an allocation of 21.24% combined in the total expenditure to education and health.
About N823.4 billion, representing 59% of the 2022 budget, is earmarked for capital expenditure. Recurrent expenditure, representing 41%, is N565 billion, which includes personnel cost, overhead and debt services.
What the Lagos State Governor is saying
Sanwo-Olu said the coming year presented an opportunity for the State Government to consolidate on the progress recorded by his administration, while leveraging investment in-flow, partnership and business-friendly policies to maximally translate his achievements into noticeable positive impact in the lives of residents.
He said, “Year 2022 Budget is the next step on our journey to true and sustainable greatness in Lagos. The challenging environment requires that we focus our interventions on areas of greatest social impact and achieving the greatest good for the greatest number in the shortest possible time. Next year is an excellent opportunity for us to consolidate on what we have done so far, and ensure that every effort, investment inflow, partnership, business policy is translating maximally into noticeable positive impact in the lives of our people.
“It is in this light that we are presenting the Year 2022 Budget of Consolidation with a size of N1,388,285,459,990.51. This financial proposal is presented with a sense of duty and absolute commitment to the transformation of Lagos to a preferred global destination for residence, commerce, and investment. The budget projects to see a continuing but gradual recovery to growth in economic activity as the global economy cautiously recovers from the impact of the Coronavirus pandemic.”
Of the total proposed expenditure, N1.135 trillion would accrue from Internally Generated Revenues (IGRs) and federal transfers, while deficit financing of N253 billion would be sourced from external and domestic loans, and bonds projected to be within the State’s fiscal sustainability parameters.
The State would be earmarking an aggregate of N137.64 billion, representing 9.92% of the 2022 budget, for the funding of green investment in Environment, Social Protection, Housing and Community Amenities.
The Governor explained that the state’s continued investment in security had yielded positive results with more allocations to be channelled to the sector in 2022 to make Lagos safer for living, working and investment.
Despite the global economic downturn, Sanwo-Olu said Lagos had seen more construction machinery deployed to deliver new infrastructure in the areas of roads, rail, housing, health, education and waterways.
He said: “There has been significant progress on the Lagos Rail Mass Transit projects, which include both the 27-kilometre Blue line that will run from Okokomaiko to Marina and the 32-kilometre Red line that will run from Agbado to Oyigbo and eventually to Marina.
“These rails, when completed, will deliver a combined 32.5 million people every month on their respective routes, reducing travel time by over 250 per cent, increasing the productivity and quality of life of our people.
“The Red line will come with eight new modern train stations, 10 new overpasses and 13 pedestrian bridges. These ambitious projects are expected to be commissioned in the fourth quarter of 2022.”
The outgoing year’s budget, Sanwo-Olu said, performed “remarkably well” despite the challenges encountered by the State, noting that the expenditure performance at the third quarter of 2021 rose to 80%
Sanwo-Olu said, “The State Government has successfully restructured all existing loan facilities, translating into a reduction in interest rates from an average of 18 per cent to about 12.75 per cent. This year, Fitch, a reputable international rating agency, upgraded the rating of Lagos from AA+ to AAA, reflecting Lagos’ capacity to service its financial obligations, compared with national and international peers, as well as its resilient operating performance during the pandemic.’’
The Governor thanked Lagosians for supporting and standing by his administration in the past 2 years. He said there were more challenges lying ahead, urging the residents to join hands with him in delivering his programmes for common good. He assured that the pace of governance would be amplified in the coming years.
What you should know
Recall that on December 31, 2020, Governor Sanwo-Olu signed into law the N1.163 trillion 2021 budget which prioritized the completion of all ongoing projects in the State and then to meet a series of objectives from employment creation, increased investment in human capital development, i.e. education and healthcare, deployment of functional technology in public services, amongst others.
The budget which was themed, “Rekindled Hope” was funded from a total revenue estimate of N971.028 billion, made up of Total Internally Generated Revenue of N723.817 billion, capital receipts at N71.811 billion, and federal transfers at N175.400 billion.