The Lagos State Government has announced strategies adopted by the state to keep its finances intact and optimize the revenue potentials in the face of the devastating effect of the coronavirus pandemic on the economy.
This was disclosed by the Lagos State Commissioner for Finance, Dr. Rabiu Olowo, while presenting the scorecard of his ministry at the ministerial press briefing to make Governor Babajide Sanwo-Olu’s first year in office at Alausa, Ikeja.
Dr. Olowo said that Lagos state achieved a 106% performance with respect to revenue against the budget in the first quarter of 2020.
He said that, although the direct impact of the pandemic has led to a drop in the State’s internally generated revenue and Federal Allocation, potential decline of Foreign Direct Investment (FDI) and increased pressure on income and purchasing power of Lagosians, the present administration had in a swift response re-ordered the 2020 Budget and re-prioritized it’s Capital Expenditure to reflect current realities.
The review of the 2020 budget assumptions was due to the devastating effects of the coronavirus pandemic and the dwindling oil prices.
The Commissioner explained that, apart from the re-ordering of the 2020 budget, the government has also initiated and adopted some other strategies to manage the impact of the pandemic.
These strategies include the principal and Interest moratorium for Small and Medium Scale Enterprises (SMEs) with loans from the Lagos State Employment Trust Fund (LSETF); Extension of Tax Filling; management and control of dedicated funds for COVID-19 response; timely payment of hazard allowance and arrangement of Special Peril Insurance for frontline health workers and volunteers.
Dr. Olowo also said that the government had succeeded in restructuring all existing internal loan facilities previously at the rate of 18%-20% to 14%, bringing about huge savings on the State’s loan repayments, thereby increasing cash flows.
On Revenue Optimization, the Commissioner revealed a number of initiatives put in place in the last one year by the present administration such as F.O.R.C.E (Focus On Revenue Creation Everywhere), an initiative conceived to monitor, review and drive innovative revenue performance whilst providing revenue assurance and the deployment of E-Tax platform for tax operations and administration matters, aimed at improving convenience in the payment of taxes to promote compliance.
He also pointed out that the automation of the operations of Lagos State Lottery Board is among the improvements that will guarantee sustainable revenue optimization to aid the finance infrastructural projects that will improve the lives of Lagosians, create jobs, and stimulate the economy through government spending.
On Land Use Charge (LUC), Dr. Olowo stated that the LUC reform is necessary to accommodate the agitations of Lagosians and to reduce the financial pressure on citizens.
According to him, “As we are aware, in 2018, there was an increase in LUC rate and at the same time a revaluation of property; this twin-shock had a sporadic increase in LUC assessment. The soon to be revealed reform will among other things, reverse the rate to pre-2018 rate”.
He explained that the intention of the State government is to keep economic activities going, without necessarily causing any untold hardship that will further aggravate the present financial hardship confronting all sectors of the State’s economy.
The finance commissioner also recalled that Governor Babajide Sanwo-Olu had in January this year, signed the Issuance of N100bn Series III Bond (the largest Bond Issuance ever raised by any Sub-National entity in the country) under its N500 Billion Bond Issuance Programme, to assist the State meet its huge infrastructure needs in critical sectors across Health, Environment and Roads, among others.