Economy

LASG generates N127bn in Q1 Y2021, saves N8.9bn via debt renegotiation

Benjamin Omoike

Access Bank

Lagos State Internally Generated Revenue (IGR), closed at N127 billion at the end of the first quarter (Q1), Y2021, just as the Government has saved about N8.9bn through renegotiation of its existing debt obligation.

The commencement of the government’s funding of the N1.16trillion budget for this year has been noted to have recorded an expenditure performance of 69 per cent with a Capital Expenditure Ratio of 42:58 per cent in Q1, Y2021.

Further reports revealed that the IGR for the State at the close of 2020 was N658 billion, with 88 per cent budget performance recorded at the close of the year.

However, the State’s debt sustainability ratio, was gathered to be at 17.8 per cent to the budget, which is below the 30 to 40 per cent standard pegged by financial regulators.

According to the State’s Commissioner for  Finance, Dr. Rabiu Olowo, on Thursday at the ongoing Ministerial Briefing at the State Capital, Ikeja, to commemorate the second year of the Governor Babajide Sanwo-Olu-led Administration in office, the deployment of the right strategies by the State, has continued to propel increase in the State’s IGR, despite the COVID-19 pandemic.

According to him, the Ministry of Finance under his watch has experienced several transformations, innovations and process reviews despite the challenges experienced in the last one year as a result of Covid-19 and its attendants.

Responding to questions on the State’s debt profile, he  mentioned that the State will continue to borrow in as much as it is prudently committed to capital projects towards economic development.

According to him, the Lagos State Treasury Office is meeting all its financial obligations through debt servicing payment of outstanding liabilities and mobilization of funds to Contractors to ensure efficient and effective infrastructural development.

The Commissioner disclosed that to achieve efficiency and reduced Cost of Fund, the State successfully re-negotiated its existing debt obligation from 19% to 14% and further down to 12%. “This brought about N8.9b savings,” he disclosed.

The Commissioner mentioned that the State is in line with the vision to deliver infrastructure at various levels, with the ratio of Capital Recurrent Expenditure for the Year 2020 pegged at 56:44 per cent.

He added that the approach for Year 2021 would not be any different, as the Government has commenced funding the N1.164trillion Budget for the year.

He disclosed that the preparation and Audit of COVID-19 Financials for the 3rd and 4th Quarter of the Year is ongoing as part of SFTAS Disbursement Index Indicator (DLI), which is meant to  invariably ensure transparency and accountability.

“However, all these are demonstrations of alertness to conscious prudent financial management strides as well as achievements in all facets of this administration’s developmental initiatives,” he said.

He affirmed that: “we remain committed in our disposition to consolidating the policies that helped in promoting our performance ratings. This is borne out of our conviction in the incontrovertible pivotal role finance plays in a Mega polity such as Lagos, yearning for accelerated development.

“The Ministry of Finance under my leadership has experienced several transformations, innovations and process reviews. These result-oriented initiatives have resulted in several process change, increased IGR and staff development.

“In order to ultimately reduce payroll fraud, about 95% of Public Servants and Pensioners’ Data have been linked to the payroll with the support of Lagos State Residence Registration Agency (LASRRA).Auto-termination of salary payment for retired staff, Prompt salary Payment,” he said.

According to him, Lagos State has recovered in excess of N1.2b in excess bank charge over the period of 6years, mentioning that the State is in the process of Recovering Ground rent owed by defunct NEPA through NELMCO and this is at 75% completion.

He mentioned that among others, the Minsitry projects to deliver by 2021 a sustainable financial strategy for the 10 year infrastructure funding plan; targets a year-on-year minimum increase of 25-30% of the IGR base as well as to deepen tax net by mapping the informal sector clusters and bring in a minimum of 1million additional tax payers on an annual basis.

Some of the activities of the Ministry within the period under review include strengthening the collection of Internally Generated Revenue (IGR) in the State;   prompt release of funds for payment of essential services to combat the Corona Virus (COVID-19) Pandemic in Lagos State; and and Reconciliation of Revenue figures.

Others are the Implementation of payment of 10 per cent Contributory Pension Scheme by the Lagos State Government and 8 per cent deductions from salaries of Public Servants respectively;  training of over 1,000 Finance and Account Officers Statewide to acquaint the Officers on the provisions of the Year 2020 Finance Act.

Others include: Re-launching the Land Use Charge Reforms and the launch of F.O.R.C.E: (Focus On Revenue Creation EveryDay) in 2020 with the objective to monitor and drive revenue performance periodically for all revenue generating Agencies.

According to the Commissioner, the “seamless & success of Land Use Charge operations has attracted about three (3) States visiting the Ministry to understudy the 2020 Land Use Charge Reforms. Such as: FCT-Abuja, Cross River & Kwara States Internal Revenue Service.”

Others include: Presentation of cheques of a total sum of N454.9 million to the beneficiaries of Deceased Civil-Servants; Processing and payment of First Half Year 2021/2022 Insurance Premium for the Global Insurance Policies Account; and curbing the negative impact of assets and collateral damage of the hijacked EndSars protest.

Also were raising finance for competition of the blue  line rail at N60b and the N93b  Red Line rail project, a 37 Kilometer rail road which runs from Marina to Agbado.This is expected to create over 6,000 direct and indirect jobs for Lagosians on projection.

Partnership agreements to drive investment in the State within the period under review include; the Lagos Taxis Scheme and Motor Vehicle Assembly Plant arrangement with CIG Nigeria Limited; Partnership with Ministry of Health on Medical Diagnostic and Service Provision to commercialize diagnostic and other health services in conjunction with private sector health service providers ongoing.

Projects sponsored in the health sector on Public Private Partnership  arrangement include: Development of a well- maintained pharmacy at Alimosho General Hospital to improve Healthcare delivery and reduce avoidable mortality; Equipping, Operation and Maintenance of Diagnosis facility in LASUTH and Upgrading of laboratory services at the General Hospital Ikorodu; Equipping Maternity and Child Centre, Eti-Osa.

Other PPP arrangements include: Partnership with Ministry of Science & Tech and Ministry of Wealth Creation to set up an ICT Park in Yaba over 22,000 sq. metres in Yaba Industrial Area; Equity investment of N500 million in the operation of Primerio; Joint venture arrangement to build a multi storey carpark with cinema hall, offices, lounge and other multi-use spaces completed; Joint venture arrangement, among others.

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