Lagos: Positive Budgeting Beyond Rituals of Annual Fiscal Planning

 

 Lagos State governor, Akinwumi Ambode

Lagos State governor, Akinwumi Ambode recently presented the state’s 2016 budget estimates to the House of Assembly with a promise to ‘implement it to the letter’. Samuel Ajayi looks at the budget which if followed could make Lagosians smile again.

Beyond the Ritual…

It is seasons of budget presentations. Across the country, state governors are booking dates with their states’ Houses of Assembly to perform the annual ritual. And that is asking the legislative arm of government to approve estimates of what the states intend to spend in the coming year. From Rivers to Sokoto; Borno to Kwara, the ritual goes on.

Last Thursday, it was the turn of the state that prides itself the Centre of Excellence, Lagos State. Akinwunmi Ambode, the man who took over the unenviable task of running the state on May 29 this year, addressed the state House of Assembly and also and presented a budget he tagged ‘People’s Budget.’
Ambode now added a caveat: he promised to implement the budget to the letter as passed by the Assembly. Perhaps, Ambode was aware of the unimpressive practice of a situation whereby the legislative arm of government passed a budget and the executive arm chooses to implement it in abeyance. The governor said this would not be the case in the budget this year. In all, he proposed that the state would spend a total of N665.6 billion.

“We will not only implement the budget faithfully, but also ensure that it works in the best interest of Lagosians,” the governor promised.

There was another aspect of the budget presentation that should get analysts interested in what Ambode has up his sleeves in the coming year. And it is the fact that capital expenditure would take 56 per cent of the budget while recurrent expenditure would take the remaining  44 percent.

The governor, a former permanent secretary in the state civil service, said the budget was an improvement of 26 per cent over the budgets of 2014 and 2015 respectively which stood at N489.6 Billion individually.

“The increase will enable our government to focus on the present challenges of security, traffic gridlock resolution including physical and social infrastructural development which has thrown up new challenges quite different from what we used to experience and have always known,” Ambode said.

During the presentation, he explained that the 2016 budget, his first full budget since he became governor, would promote massive investment in security, transport and traffic management, physical and social infrastructural development and enhance job creation. He explained that the intention of his government was to use the 2016 budget to strategically build new infrastructure, as well as maintain existing ones, adding that wealth and employment creation will also receive adequate attention in the course of the year.

Budget Breakdown

Figures of the budget indicated that recurrent expenditure would gulp a total of N278.909 billion while capital expenditure takes the balance N383.678 billion. This represents a ratio of capital to recurrent to be 58:42 as against 51:49 in 2014 and 2015.
Ambode put the total revenue estimate for 2016 fiscal year at N542.873 billion, saying the balance of N119.714billion will be funded through deficit financing constituting 0.41 per cent of the state GDP based on 2016 budget alone and a cumulative debt to GDP ratio of about  three  per cent. On the size of the budget, the governor earmarked N120,508,571,598 for General Public Services representing 18.19 per cent N28,559,021,841 to Public Order and Safety, representing 4.31 per cent    while Economic Affairs received a lion share of N211,043,408,183 representing 31.85 percent.
In other sectors, Environment got 8.1 per cent of the budget totaling  N53,043,599,505, Housing and Community Amenities  got N62,713,091,867 representing 9.46 per cent, Health got N64,677,679,096 representing 9.76 per cent while Recreation, Culture and Religion has N4,636,917,054 which is 0.70 per cent of the budget. Education sector also received N113,379,337,664, which represents 17.11 per cent of the budget while Social Protection got N4,025,980,116, which is 0.61 of the budget.
Apparently aware that the nation’s main foreign earner, crude oil is taking a free fall at the international market, the governor said the budget is pegged on $38 dollar per barrel saying it was in line to maintain a conservative approach in estimating the Federal allocation for 2016.
Special Status for Lagos…
Ambode felt it was high time Lagos State was given a special status as being proposed for decades. He said the state was still being owed some money which he put at over N50 billion. According to him, this was money expended on federal roads in the state. His words: “Fiscal Federalism and according Lagos a Special Status will benefit the State as we implore the Federal Government to look into this as soon as possible. As you are aware, the Federal Government still owes Lagos State over N50billion expended on federal roads in Lagos state.  We look forward to an early refund to enable us utilize the fund on other infrastructure that require attention.”
Perhaps, Ambode was aware of the criticism against his party, the All Progressives Congress, APC, over non-implementation of the a-meal-per-day for children in primary school, the Lagos State governor said this has been included in the 2016 budget as presented to the Assembly.  Ambode said the state government would commence the A-Meal- a-Day Programme in the state public primary schools from next year, adding that it would be done in collaboration with the federal government who would provide 60 percent of the funding, while the state government will match it with 40 percent.
“This programme promises not only to improve the daily nutrition of our children, it will also create an economy of its own, with opportunities for job creation, income generation, poverty alleviation, and so on.”

He also announced that the new year would see the development of the state’s e-curriculum that would see students in public schools in the state presented with what he called Ibile Tablets.

“I am happy to inform you that in 2016 we will develop our e-Curriculum, leading to the distribution of Ibile Tablets to students in our public schools. This revolution, at the Secondary School level, will set a new standard in our educational system, and further enhance the knowledge of our children to enable them compete effectively with their peers in developed countries.”

The budget coming few weeks after the governor made arguably the biggest investment in security by any state government in the history of the country, perhaps, Ambode has finally shaken off the perceived lethargy he was accused of when he first came in about seven months ago. And if the budget is implemented as promised, many by people of the state would feel the impact of government more beyond the annual ritual of budget presentation that has no positive effect on the people.