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President Muhammadu Buhari will on Thursday begin a two-day working visit to Lagos State. The event is a historic one as it marks the first time the President will visit the state since he assumed office on May 29, 2015.

While in the state, he will perform the official flag-off ceremony for the construction of the Lekki Deep Sea Port project, Ibeju Lekki, inspect ongoing construction works at the Eko Atlantic City, Victoria Island, and commission the Ikeja Bus Terminal.


The cost to Lagos State

The Lagos State Government declared a Public Holiday on Thursday the 29th of March for the State to welcome the President. This decision comes with an opportunity cost to Lagos State in terms of loss of economic value created and salaries paid for work not done.

The former, we can extrapolate using the states GDP figures, while the latter we can determine from how much the State pays its workers.

Using GDP

Based on a widely circulated figure, the state claims it has an estimated GDP of $90 billion. This equates to $246 million or N8.8 billion per day in loss of economic activity. Let’s even assume 50% loss in value of economic activity in the state, it comes to N4.4 billion.

Is this plausible? If you include the disruption in economic activities due to heavy traffic, roadblocks, restrictions on movement to the public holidays then a 50% loss is likely.

Employee Wages

The last most recent published accounts of Lagos State was for the year ended December 2015. In the account, the state claims its personnel costs amount to N86.3 billion annually. Dividing that into 12 months and 22 working days in March amounts to about N327 million only.


 

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Other Countries

While it is difficult to get cost of Presidential Visits to states in Nigeria, some countries publish theirs and we can also use this as a proxy. Here is one we found online on State visits to the UK;

Xi Jinping, China – £1.43m

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Enrique Pena Nieto, Mexico – £188,290

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Michael Higgins, Ireland – £170,544

Tony Tan, Singapore – £158,356

 source 

These are actual spends and does not include GDP loss due to public holidays. In most countries abroad, work continues unhindered.

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How much will it cost the Presidency

Figures from the 2018 draft budget place the expected budget for local trips for the President at N250 million. For security reasons, the exact details of the President’s entourage and vehicles are not disclosed.

Here is a rough estimate of how much we think the trip will cost. Some expenses will be borne by the Lagos State government being the host state.

Advance party N10 million

An advance party usually arrives before the President, to coordinate protocol and logistics. Assuming the advance party is made up of at least 200 officials, with each receiving an out of station allowance of 50,000 per night. That equates to N10 million

Air Transport N8.7 million

The President’s official vehicles are usually moved by aircraft carrier ahead of his arrival. This is done using a C-130 aircraft carrier. The C-130 has a tank capacity of about 6000 gallons which equates to 30458 liters. Using an estimate of N220 per litre, fuelling the plane could cost N6.7 million for a one-way trip. For the regular Presidential aircraft, fuelling costs could hit N2 million.

Fuel N1,500,000

The exact size of the Presidential convoy is unknown, as some cars in the convoy belong to other agencies related to the Presidency. Assuming the Presidential convoy where to be 50 in number with an average fuel bill of 30,000 per vehicle. That adds to N1,500,000.

Miscellaneous N5,000,000

While unknown, trips such as this also factor miscellaneous expenses. We estimate this to be at least an N5 million.


How much in total

Lagos State

  • Based on GDP at 50% loss – N4.4 billion
  • Based on salaries paid without work – N327 million

Total for Lagos State – N4.72 billion

 

Onome Ohwovoriole has a degree in Economics and Statistics from the University of Benin and prior to joining Nairametrics in December 2016 as Lead Analyst had stints in Publishing, Automobile Services, Entertainment and Leadership Training. He covers companies in the Nigerian corporate space, especially those listed on the Nigerian Stock Exchange (NSE). He also has a keen interest in new frontiers like Cryptocurrencies and Fintech. In his spare time, he loves to read books on finance, fiction as well as keep up with happenings in the world of international diplomacy. You can contact him via onome.ohwovoriole@nairametrics.com

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