LASG debunks BudgIT’s bankruptcy report, says State remains economically, financially viable

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By Moses Adeniyi

Against the  assertions that the State is within the bankrupt region among States in the Federation, the Lagos State Government had said that it is economically and financially solid and viable.

The State government made its position  known on Monday, to debunk the publication by BudgIT, a public finance analyst, titled ‘Ability of States to Meet Monthly Recurrent Expenditure and Loan Repayment Obligations, 2019’.

Describing the publication by  BudgIT as false, the Governor Babajide Sanwo-Olu led administration said it was a mere  “misinformation” and an “error”which BudgIT has admitted and tendered apologies for.

According to the State’s Commissioner for Finance, Dr. Rabiu Olowo, in a Press release, a copy of which was made available to Nigerian NewsDirect,  Lagos State continues to meet all its recurrent and loan service obligations, which nullifies the claim of  BudgIT’s report.

Describing the information that was published as “incorrect, inaccurate and a gross distortion of the actual facts,” the Commissioner said  the accurate information that ought to have been stated in the table published by BudgIT  as extracted from Lagos State’s published 2019 Audited Financial Statements, should have reflected a total revenue of N644.76 billion; Recurrent Expenditure and Loan Repayment Obligation of N554.2 billion and a Surplus or Deficit of N90.5 billion

The Commissioner said: “As indicated in Lagos State’s published Financial Statements (and as extracted above), the information in the table published by BudgIT should have correctly indicated asurplus of N89 billion (Eighty-Nine Billion Naira)

“Lagos State Government continues to efficiently explore options in both the Financial and Capital Markets, to extract optimal funding solutions, which will enhance the administration’s ability to deliver on the construction, renewal and improvement of the deficit in social and physical infrastructure for the benefit of Lagosians; who represent 10% of Nigeria’s population.”

He added that in the year under review (2019), Lagos State restructured all existing internal loan facilities to 14% per annum, from between 18% and 20% per annum, stating that “these rates have even more recently been re-negotiated to circa 12% per annum.”

Olowo stressed that Lagos is the only State that is not reliant on the allocation from the Federal Account Allocation Committee, with Internally Generated Revenues representing circa 72% of the State’s aggregate revenues to enable it address challenges faced by megacities across the world.

According to him, as at August 2020, Lagos State’s Internal Revenue Service is doing 103% above budget, and well above 2019 figures, despite the COVID-19 pandemic “which demonstrates the fiscal resilience of the Babajide Sanwo-Olu administration for a Greater Lagos.

“Lagos State is economically and financially viable and the Government of Lagos State continues to expand funding sources whilst also ensuring that prudence and sustainability are at the fore of all funding and expenditure decisions,” the Commissioner stressed.