The realities of the impact of COVID-19 on the economy have forced Lagos State to slash its 2020 budget which was initially approved by the State House of Assembly to N920.5 billion from N1,168.6 trillion, this was disclosed by the Commissioner for Economic Planning and Budget, Sam Egube.
The Commissioner said the budget was revised to help mitigate the economic and social headwind precipitated by the novel Coronavirus pandemic in the state, according to Premium Times.
Details of the revised budget show a 21 per cent cut in the size of the budget with the financing deficit-increasing slightly by 11 per cent from N97.5 billion to N108.1 billion, Mr. Egube said.
“Recurrent expenditure (Debt and Non-Debt) declined by 10 per cent from the initial N457.5 billion to N411.61 billion and total capital expenditure reduced by 28 per cent from N711.033 billion to N508.9 billion. The revised total revenue represents a drop of 24 per cent from the projected N1,107.03 billion to N812.5 billion.”
The commissioner said factors that prompted the government’s action, include fall in oil prices which has damaged statutory allocation expectations, downward pressure of IGR, and the devaluation of Naira.
He explained that increase in unemployment and poor GDP growth would result from reduced public and private investment, increased inflation, a decline in demand for goods and services and a reduction in manufacturing activities.
Highlighting the state’s response to COVID-19 shock, the commissioner said Lagos would restart the economy and re-imagine its operations.
“To restart the economy, we are going to optimise the state’s budget for investments in jobs and priority sectors through jobs creation, economic stabilization, and fiscal consolidation.
“While to re-imagine the state economy, we will prepare the state to operate and thrive within the new reality with digitisation, business environment reforms and economic diversification,” Mr. Egube said.
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