Following the economic damage caused by the COVID-19, Lagos State Executive Council yesterday disclosed plan to revise the state's 2020 budget by 21 per cent, from the N1.168 billion hitherto approved by the State House Assembly to N920.5 billion.
The proposal for a budget review is expected to be sent to the state's lawmakers today.
Lagos State Commissioner for Economic Planning and Budget, Mr. Sam Egube, made this known during an interview in Lagos.
Egube said the deficit in the revised budget, if approved, was expected to increase slightly by 11 per cent, from N97.533 billion to N108.005 billion.
According to him, recurrent expenditure would decline by 10 per cent from the initial N457.529 billion to N411.608 billion, while total capital expenditure would be reduced by 28 per cent, from N711.33 billion to N508.861 billion.
He said the revised total revenue represents a drop of 24 per cent from the projected N1,107,029 billion to N812.464 billion.
The commissioner listed some of the factors that necessitated the review to include fall in crude oil prices, "with deleterious effects on statutory allocation expectations, slide in internally generated revenue (IGR) and devaluation of the naira, reduced public and private investment, increased inflation, decline in demand for goods and services and reduction in manufacturing activities, which portends lower gross domestic product (GDP) growth and increased unemployment."
Egube stated that part of the state's holistic approach to the COVID-19 shock already adopted by the government going forward include maintaining a strong pandemic response, restarting the economy and reimagining the way Lagos State operates.
He explained that with the strong pandemic response, the state government would engender food security and safety net mechanism, economic stimulus, and ensure public safety and wellbeing.
"To restart the economy, we are going to optimise the state's budget for investments in jobs and priority sectors through job creation, economic stabilisation and fiscal consolidation. While reimagining the economy, the government will prepare the state to operate and thrive within the new reality with digitalisation, business environment reforms, improved economy and diversification of revenue sources," he added.
Lagos State House of Assembly had in December 2019 passed the N1.169 trillion 2020 appropriation bill. The approved budget contained recurrent expenditure of N457 billion and capital expenditure of N711 billion, showing a strong preference for capital projects at 60 per cent.