By Jeph Ajobaju, Chief Copy Editor
Lagos made N127 billion in internally generated revenue (IGR) in the first quarter of 2021 (Q1 2021), which splits as N42.333 billion for each of the three months and is short of the N60.318 billion per month envisaged in the 2021 fiscal year.
It, however, says leakages in the system have been plugged despite the impact of the coronavirus pandemic on the economy of the state ranked the fifth largest in Africa.
Finance Commissioner Rabiu Olowo made the disclosures in Ikeja while briefing the press on the achievements of Governor Babajide Sanwo-Olu in his two years in the saddle.
“Our revenue trajectory and the trend shows that Lagos is very different from others. A few years ago, our monthly IGR was about N800 million, but 15 to 20 years later, we are talking about billions,” Olowo said.
This is not accidental, he stressed, it is the “result of well thought out strategy, partnerships, and collaborations with institutions and investments in technology.”
He added: “No institution or organisation is immune to economic sabotage and leakages, but we are proactive enough to predict such sharp practices and minimise them.
“We are also leveraging technology to predict and prevent fraud by digitalising our processes.”
Olowo said the state’s debt sustainability ratio currently stands at 17.8 per cent, against the ratio of between 30 per cent and 40 per cent recommended by regulators.
The sustainability ratio means that the state pays back its loans as and when due, he explained.
“Debt is very good,” he added, “especially for a megacity status that Lagos wants to enjoy. The most important thing is debt management and one of the most respected metrics to measure debt management is the debt sustainability ratio.
“This is to say how much debt do you have and how it compares with the revenue potential, your ability to pay. That is the most important thing for everyone to consider.
“Lagos’ debt sustainability ratio is currently at 17.8 per cent. This tells a lot about our ability to own and manage debts effectively.
“As our revenue grows and we pay our debts, we will continue to take more loans so far they are used to provide capital projects that will ensure the economic success of the people, now and in the future.’’
Lagos tops other states
Data published by the National Bureau of Statistics (NBS) shows that Lagos made the largest IGR of N418.99 billion in 2020, accounting for 32.1 per cent of the total N1.31 trillion generated by the 36 states and the Federal Capital Territory (FCT).
However, the N42.333 billion IGR Lagos generated each month between January and March this year is N17.985 billion off the monthly N60.318 billion projected in January by Economic Planning and Budget Commissioner, Sam Egube.
He said
“The total budget size of the 2021 budget is N1.164 trillion and will be funded from a total revenue estimate of N971.028 billion, comprising Total Internally Generated Revenue (TIGR) of N723. 817 billion, capital Receipts of N71.811 billion and Federal Transfer of N175.400 billion.
“We shall achieve this by expanding the tax net, simplifying the tax process, improving our transaction taxes and the appropriate use of technology in addition to improving the work environment, training and tools of our tax administration personnel.
“This will improve the efficiency in operations of all revenue-generating agencies.
“We believe that there are huge revenue-generating opportunities in the state: including real estates, transportation sectors and our markets generally, among others.
“We will continue to use data and intelligence to unravel revenue opportunities and leakages.”