The Lagos State government has earmarked huge capital expenditure in the 2022 fiscal year to service key growth areas to consolidate the recovery of the state’s economy and positively impact residents’ livelihoods.
In the proposed N1.388 trillion budget for the year 2022 presented to the Lagos State House of Assembly on Wednesday, Governor Babajide Sanwo-Olu revealed that the state would spend N325 billion to deliver vital infrastructure projects in key sectors to energise and expand the growth of the state’s economy.
The key areas of growth identified by the governor include works and infrastructure, waterfront infrastructure development, agriculture, transportation, energy and mineral resources, tourism, entertainment and creative industry, commerce and industry, as well as wealth creation and employment.
He explained that the human capital development drive of his administration was projected to take a leap in 2022, with an allocation of 21.24 per cent combined in the total expenditure to education and health.
The proposed budget, christened “Budget of Consolidation”, will be the last full-year fiscal plan of the state before the general elections in 2023.
In his presentation, Governor Sanwo-Olu believes the coming year presents an opportunity for the government to consolidate on the progress recorded, while leveraging investment inflow, partnership and business-friendly policies, to maximally translate its achievements into noticeable positive impact in the lives of residents.
About N823.4 billion, representing 59 percent of the 2022 budget, is earmarked for capital expenditure while recurrent expenditure – including personnel cost, overhead, and debt services – is N565 billion – representing 41 percent.
The governor noted that his administration had clearly articulated its vision in governance through the T.H.E.M.E.S Agenda in the last two years, adding that the state was now looking towards the future with the activation of the implementation of a 30-year development plan (2021-2051) which replaced previous 13-year growth plan developed in 2012.
“Year 2022 Budget is the next step on our journey to true and sustainable greatness in Lagos,” he said. “The challenging environment requires that we focus our interventions on areas of greatest social impact and achieving the greatest good for the greatest number in the shortest possible time.
“It is in this light that we are presenting the Year 2022 Budget of Consolidation with a size of N1,388,285,459,990.51. This financial proposal is presented with a sense of duty and absolute commitment to the transformation of Lagos to a preferred global destination for residence, commerce, and investment.
“The budget projects to see a continuing but gradual recovery to growth in economic activity as the global economy cautiously recovers from the impact of the coronavirus pandemic.”
Of the total proposed expenditure, N1.135 trillion would accrue from Internally Generated Revenues (IGRs) and federal transfers, while deficit financing of N253 billion would be sourced from external and domestic loans, and bonds projected to be within the state’s fiscal sustainability parameters.
The state would be earmarking an aggregate of N137.64 billion, representing 9.92 per cent of the 2022 budget, for the funding of green investment in environment, social protection, housing and community amenities.
On Security, the governor explained that the state’s continued investment in the sector had reaped positive dividends, stressing that more allocation would be channelled to security in 2022 to make Lagos safer for living, working and investment.
Despite the global economic downturn, he said Lagos had seen more construction machinery deployed to deliver new infrastructure in the areas of roads, rail, housing, health, education and waterways.
“There has been significant progress on the Lagos Rail Mass Transit projects, which include both the 27-kilometre Blue line that will run from Okokomaiko to Marina, and the 32-kilometre Red line that will run from Agbado to Oyigbo, and eventually to Marina,” Governor Sanwo-Olu told the lawmakers.
“These rails, when completed, will deliver a combined 32.5 million people every month on their respective routes, reducing travel time by over 250 per cent, increasing the productivity and quality of life of our people.
“The Red line will come with eight new modern train stations, 10 new overpasses and 13 pedestrian bridges. These ambitious projects are expected to be commissioned in the fourth quarter of 2022.”
The outgoing year’s budget, the governor said, performed “remarkably well” despite the challenges encountered by the state, noting that the expenditure performance at the third quarter of 2021 rose to 80 per cent.
He said the need to stabilise the state’s economy led to the adoption of far-reaching cost-saving measures, including restructuring of local borrowings to reduce overall debt service obligations on Lagos.
Governor Sanwo-Olu thanked the residents for supporting and standing by his administration in the past two years.
Noting that there were more challenges lying ahead, he urged them to join hands with him in delivering his programmes for common good, with an assurance that the pace of governance would be amplified in the coming years.