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₦1.768trn 2023 Budget: Why we allocated N482.86bn, 27.3% of total size to modern Infrastructure – LASG



….we are deliberate in the way we choose our projects – SA works

By Moses Adeniyi

The Lagos State Government (LASG) has justified why it allocated the larger chunk of the its 2023 ₦1.768trn budget to infrastructure, ahead of other key sectors as health and education.

According to the State Government, the lines of infrastructure are not close ended, but is a nexus that drives the functioning of all sectors, thus it’s line relatively defined.

The Lagos State Government has allocated 27.3% of its entire 2023 Budget to modern infrastructure, amounting to the tune of N482.86bn of the ₦1.768trn budget.

According to the State Commissioner for Economic Planning and Budget, Mr. Sam Egube, the lines of infrastructure cuts across all sectors as a nerve that enhances efficiency for their functioning.

He said: “When you think in terms of infrastructure, the budget tends to break things down into specific lines, but in the lives of our people, the feeling they get and what they see is not analysed in that way.

“So, when I do a road that opens you up and makes it easy for you to go into a healthcentre, you would call that not health, but the primary objective of doing that road is to open up the area to get into a hospital, so when you look at infrastructure, you will be looking at the infrastructure that is driving things in education, health system, transportation. So, all infrastructure is not just road or rail, it’s interwoven in a very intelligent way – a meshed way. Infrastructure is what makes the cost of doing business go down.”

Mentioning that citizens may not be disposed to provide for themselves infrastructure, he said the State looks to “build up our infrastructure basket on a developmental basis.”

Disclosing this at the press conference on the analysis of year 2023 budget held at Ikeja, the Capital City of Lagos, Egube said the 2023 Lagos budget christened “Budget of Continuity” was prepared to continue the projects of the Governor Babajide Sanwo-Olu led administration, especially in delivering reliable and sufficient infrastructure that meets the needs of a 21st century city.

Egube said: “The State is totally committed to ensuring that the dividend from its investments in Integrated Transport Infrastructure, which will materialise into the birth of the fully functional light rail (Red-Blue) system, the first of its kind by a sub-national Government in Africa and the 37km Fourth Mainland Bridge will be felt by the citizens of the State. These will reduce commute time to millions of Lagosians, reduce congestion on the existing Carter, Eko, Third Mainland Bridges and Ikorodu Road, thus increasing productivity, quality of life, as well as improving the overall transportation system in the State.”

The Commissioner highlighted the infrastructure projects the allocation captures in the budget as follows: Construction of the second phase of the Blue line rail project from Mile 2 to Okokomaiko; Completion of  eight Stadia across the five IBILE divisions of Lagos State, to facilitate youth development, engagement and community sports; continuous construction and rehabilitation of schools across the State to significantly improve access to quality education; completion of 130 bed new Massey ultra-modern and fit for purpose Pediatric programmed and emergency general hospital that will be the largest specialist children hospital in Sub-Saharan Africa.

Others include, the completion of the modern 280 beds General Hospital serving the people of Ojo and its environs which is currently at 47% completion; completion of the mental health facility in Ketu Ereyun in Epe local government; completion of the Opebi Link bridge to Maryland that will improve significantly travel time and alternative route options the axis; rehabilitation/upgrading of Phase II Eti-Osa – Lekki-Epe Expressway Project from Eleko T-Junction – Abraham Adesanya among others.

According to Egube, “most of these projects are contractor funded, with structures that provide very beneficial payment terms that gives the State upfront value (front loaded) ahead of payments; thereby increasing the sustainability benefits to the State.”

In her remarks, the Special Adviser to the Lagos State Governor on Infrastructures, Engr. (Mrs) Aramide Adeyoye, said the State is deliberate in the mannerisms of choosing projects plans for execution.

“We are deliberate in the way we choose our projects,” she said, mentioning that they are carefully selected to run in conformity to the effectiveness of the intermodal transport blueprint of the State.

Meanwhile, the State Government has also allocated 13% of the Budget for the provision of affordable and world-class education, healthcare and social services for its teeming populace to make the system accessible and affordable.

He said: “Human capital continues to be an area of deep interest to the State. We believe that a population that is healthy, skilled and inclusive can only convert the opportunities in the State to value.”

He added that: “We also intend to expand our effort in Social Interventions with an investment of N9.6bn as against N8.3bn in Y2022 Social Intervention and Humanitarian Programme that will serve as support for micro and small businesses. We will continue to procure training equipment, empowerment tools for graduates in skills and vocational centers across the State.”

According to the State Commissioner for Education, Mrs. Folasade Adefisayo, the budget would further build on the transformation process in the sector which she said has various steps.

Moreover, the State Government has reiterated its stand in continuing to invest in provision of affordable Homes for residents through its Social Housing Programme by injecting a total of N67.1bn.

Some of the social housing programmes the Budget targets include: the completion of 444 units of building Projects at Sangotedo Phase ll, completion of 420 units of building Projects at Ajara, Badagry Phase ll and the construction of 136 units of building Projects at Ibeshe ll, among others.

According to Egube, the State government commitment towards the State’s 5-year Agric road map had risen to the commissioning of the Imota Rice mills which will provide support to farmers and improve food systems generally in the State.

“In addition to this, the State will invest a total sum of N45.1bn for Food Security through Cattle Feedlot Project, Fish Processing Hub programmes and Wholesale Produce Hub & Market, thus improving wholesomeness of food, reduction in food prices and optimization of the Agricultural sector,” he disclosed.

He added that “The N86bn investment in Public Order and Safety Sector shows the State’s continuous commitment to ensuring that Lagos is safe for living, working and investment.

“It is important to note that N12bn has been earmarked for the provision of Rescue and Emergency operation equipment for disaster management. Also, provision has been made for surveillance and body cameras for security monitoring.”

He said the year 2023 Budget will invest in strengthening intelligence gathering/capacity building capabilities together with improving the ease of doing business through the Smart-City project, the Lagos new Data Center project, Eko Excel project, E-GIS and the Oracle upgrade project.

While reviewing the approved Y2022 Budget of ₦1.758trn which had a total revenue of ₦1.237bn and deficit financing of ₦521.275bn; Capital to Recurrent Ratio that stood at 66:34, with Capital Expenditure of ₦1.167trn and a Recurrent Expenditure of ₦591.281bn.

Egube said as at December 31st, 2022, the budget posted a performance of 74 percent, with revenue performance at 77 percent, while Capital & Recurrent Expenditure performed at 70 percent and 81 percent respectively.

He added that the 70 percent performance of capital is as a result of the late closure of the 134.815billion Bond transaction, which was oversubscribed in December 2022 and utilization differed till Y2023.

The State approved Y2023 Budget of ₦1.768trn is made up of ₦1.020trn (Capital Expenditure) and ₦748.097bn (Recurrent Expenditure- Debt Charges inclusive), resulting in a Capital to Recurrent ratio of 58:42.

The total Revenue is estimated at ₦1.418trn, while deficit-funding requirement is ₦350.411bn, which at 25 percent of Total Revenue implies that the Budget is strongly dependent on Revenue.

Egube urged the residents and businesses in the State to be tax committed to fulfil their obligations as and when due, stressing that it was by such commitment that the State Government could actualise its projects.

Recall that Lagos State Governor, Mr Babajide Sanwo-Olu had January 26th, signed the ₦1.768trn budget for implementation, reiterating it was drafted for continuity of projects his administration has begun.

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