Lagos — After the Lagos State House of Assembly postponed the date of its original presentation, Governor Babatunde Raji Fashola (SAN) finally presented an appropriation bill of N429.596 billion recently. Designed principally to complete the existing projects, the 2010 budget thus raises some questions beyond the appreciation of value and purpose that it is meant to serve.

The administration of Governor Babatunde Raji Fashola, has just one and a half years to go. Yet its core objective of transforming Lagos State to a model mega city is still a mirage. But the 2010 fiscal plan offers the administration another opportunity to address the Gordian knots of infrastructural decay, underdevelopment and insecurity that tie Lagos State, as the global economic crisis still bites harder.

This must have informed the decision of Fashola to tag the 2010 fiscal plan as Budget of Consolidation prepared on the basis of a medium term expenditure framework. The budget title seems appropriate when compared with the 2009 appropriation law, which was tagged Budget of Accelerated Growth. What it suggests is the new effort aimed at achieving unconsolidated growth the administration has been recording since May 29, 2009.

Amid these challenges, Fashola eventually presented an Appropriation Bill of N429.596 billion for the 2010 fiscal year to the state House of Assembly last week. The presentation brought together all stakeholders in the state irrespective of political, religious and ethnic affiliation. Speaker of the House, Rt. Hon. Adeyemi Ikuforiji seized the occasion to urge Fashola to beware of flattery; a path he said could rubbish the gain of the administration if toed.

But the policy thrust of the 2010 budget was built on the premise that no project shall be abandoned; public order and safety be maintained and the state finance well-managed for optimum benefit. At periphery, the thrust suggests that a new beginning beacon at Lagosians, depending on the level of implementation and performance of the budget, but this requires thorough monitoring.

Compared to the previous fiscal year when N405 billion was passed, the 2010 budget proposal shows a difference of N24.596 billion above the 2009 Appropriation Law. This difference only represents a marginal increase of 5.3 percent, though can make a significant difference if at last the bill sails through and if its implementation process is thorough and equally transparent.

As indicated in its breakdown, about N178.820 billion is allocated for recurrent expenditure for the 2010 fiscal year while capital expenditure stands at N250.778 billion for the same period. But under the recurrent expenditure, about N55.079 billion is allocated for total personnel cost just as another N123.739 billion is reserved for total overhead cost in the next fiscal year.

The budget proposal further shows that the detailed components of the total overhead cost are broken down as follows: overhead cost stands at N67.002 billion; subventions to gulp N18.977 billion as well; transfer to other funds to get N50 million; public debt charge is estimated at N17.683 billion while the dedicated expenditure has a total share of about N20.027 billion.

As for capital expenditure, a whooping sum of N250.778 billion was set aside. Under the arrangement, core capital alone will gulp N209.207 billion; capital development estimated at N22.804 billion; matching grants to claim N5.021 billion; counterpart funding has a total share of N5.246 billion while special expenditure too stands at N8.50 billion. When compared with the recurrent expenditure, the capital expenditure shows a difference of 28.94 percent higher, and this suggests the task of executing key infrastructural projects required for realising the goal of mega citymay come earlier.

On the sectoral allocations, its demarcation follows the standardised format set by International Development Agencies (IDAs) such as the World Bank and International Monetary Fund (IMF). Sectorally, economic affairs received the highest share of about N145.160 billion (33.79 per cent); general public service gets the second largest allocation of N105 billion (24.58%) while the education sector clinches the third largest allocation of N60.041 (13.985 per cent).

Other sectors such as housing and community amenities to receive N36.917 billion (8.59 per cent); environmental protection N28.7 billion (6.68 per cent); public order service N10.550 billion (2.46 per cent); recreation, culture and religion N9.375 billion (2.18 per cent) while social protection shares N3.018 billion (0.70 per cent). In addition, the budget is premised on a benchmark of $50, a state GDP growth rate of 8 percent and 20 percent interest rate on denominated loans.

But while addressing the state stakeholders, Fashola highlighted key goals and strategies of the 2010 budget. The whole budget thrust was hinged on aggressive revenue generation, completion of on-going infrastructure projects, maintenance of existing infrastructural facilities and public utilities, human capital and institutional reform, mitigation of global warming, teachers' welfare enhancement, enhancement of community-based vocational education and sustenance of the state free healthcare service.

Really, the goals and strategies appear good. Understanding the volatility of international oil prices, less emphasis was placed on allocations from the Federation Accounts. But in totality, the Fashola administration expects a total of N307 billion in the 2010 fiscal year. Of the total budget value, it is expected that N204 billion will be raked in through internally generated revenue (IGR); N78 billion from the Federal Allocation; dedicated revenue estimated at N20 billion while the extra-ordinary revenue stands at N5 billion.

Despite the prevalent macro-economic constraints, Fashola observed that the state "cannot afford to waver on its commitment to massive investment in infrastructure to create jobs, improve investment climate, alleviate poverty and sustain economic recovery and growth. The conventional wisdom being demonstrated across the globe is that massive public sector spending on infrastructure is a critical factor in lifting distressed economies out recession".

Against this background, Fashola observed thatmore emphasis will be placed on public-private partnership (PPP) as a viable option for funding infrastructure expansion. It is on this note that the governor said it required the collective responsibility of all stakeholders to transform the infrastructural challenge confronting the state into profitable economic opportunities in diverse sectors including housing and real estate, rail, road and water transportation. But the cold war between the executive and the legislature may generate some friction. Ikuforiji opined that the budget lacks the principle of even distribution.

But this position is not likely to inhibit the cardinal objectives of the Fashola administration to promote investment portfolio opportunities for Nigerians in many of our developmental projects. It entails the need to tap into the PPP approach as a way of devising investment choices beyond the traditional basket. Lagos is firmly on the path of becoming a major economic success story, and the 2010 budget is a critical bridge to the attainment of the goal.

Evident from the facts earlier presented, the difference between expected revenue and the budget value stands at about N122.596 billion. This figure raises critical questions: where is the Fashola Administration going to raise this colossal amount? If it could not raise the net value, how can the administration consolidate and complete existing infrastructure projects identified under the 2010 fiscal plan? During his presentation, Fashola did not explain how to bridge this difference if the budget performance will be optimal.

Different from the traditional practice of initiating new projects in the new fiscal year, the administration placed more emphasis on the completion of on-going infrastructural projects and maintenance of existing infrastructural facilities and public utilities. The existing projects were all made provisions in the 2009 budget, and such projects must have been executed to a certain degree. But the governor did not address the level of completion of the existing projects and how much the state now requires for their completion.

As it is now, Lagos residents are in the dark regarding the level of completion of the existing projects and what value the state now needs to ensure their final completion. Fashola has responsibility to clearly explain how much the administration intends to inject into the existing projects in relation to their level of completion. This is at least necessary to demonstrate the level of accountability and transparency of the administration.

Worthy of note is the fact that the 2010 budget is built on the pillar of aggressive revenue generation. The state only expects N78 billion from the Federation Account, which represents about 20 per cent of the total budget value and about 25 per cent of the expected revenue. This also means that the state also expects about 80 percent from the internally generated revenue (IGR). This implies at this critical period that the next fiscal year may be terrible for Lagos masses, indicating that a good number of them may relocate from the metropolis as intensified tax drive may make living condition harsh and unbearable.

The governor restated commitment to deploying the instrument of Lagos State Microfinance Institution (LASMI) to promote informal sector. But there have been allegations that artisans and traders are not benefiting from the LASMI fund. Rather, the state political actors and government loyalists were said to be taking advantage of the fund, thus eroding public confidence and trust. This raises the need for the administration to re-chart its implementation strategies for effective disbursement of the LASMI fund.

But, it seems that there is now an end in sight to the rift between the state government and teachers in public schools. With the allocation of N60.041 billion, the interest of teachers in primary and secondary schools has been duly addressed. This means strike action has been indefinitely suspended.

Aside, the Fashola administration promised to sustain the state free healthcare services; mitigate global warming through greening; beautification programme and other initiatives; strengthen empowerment of farmers and fishermen for food production and processing; develop human capital; ensure institutional reforms and enhance community-based vocational education. If these areas are well-accommodated, it will definitely signify a new beginning in an effort to transform to a model mega city.