The Lagos State Commissioner for Finance, Dr. Rabiu Olowo, has reeled out strategies already deployed by the State government to keep its finances intact in spite of the devastating effects of the COVID-19 pandemic on the economy.
He said that, although the direct impact of the pandemic has led to a drop in the State’s IGR 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 swift response re-ordered the Y2020 Budget and re-prioritised its Capital Expenditure to reflect current realities.
Dr. Olowo, who made this disclosure while giving the scorecard of the Ministry at the Ministerial Press briefing commemorating the one year in office of the State Governor, Mr. Babajide Sanwo-Olu at the JJT Park Alausa, Ikeja, declared that Lagos State achieved 106% performance in the first quarter of Y2020 Revenue as against Budget.
He, however, maintained that in view of the devastating effects of the COVID-19 pandemic and the dwindling Oil prices, which is a twin-shock to the whole of Nigeria, the State Government realised that revenue numbers will be affected and as such, the need arose to review the Y2020 Budget assumptions.
The Commissioner explained that, apart from the re-ordering of the Y2020 Budget, the government has also initiated and adopted some other strategies to manage the impact of the pandemic.
These strategies, according to him, include the Principal and Interest moratorium for Small and Medium Scale Enterprises (MSMEs) 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 remarked the success recorded in restructuring all existing internal loan facilities previously at the rate of 18%-20% to 14%, brought about huge savings on the State’s loan repayments, thereby increasing cash flows.
In the area of Revenue Optimisation, 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 averred that the automation of the operations of Lagos State Lottery Board are among the improvements that will guarantee sustainable revenue optimisation to aid the finance infrastructural projects that will improve the lives of Lagosians, create jobs and stimulate the economy through government spending.
Speaking on the government’s reform in the area of 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 Commissioner reiterated the partnering posture of the Ministry and its effective working relationship with other MDAs as an important element to deliver Mr. Governor’s agenda, saying that “Every decision is a Financial Decision, hence, we have to work with all MDAs from policy formulation to execution as a Credible Finance Partner”.
“A few deliveries of the Partnering functions are the implementation of the minimum wage, employers contributory pension, retirement benefits; capital project analysis; public private partnerships, signup of Lagos State University 8,000 capacity hostel, Implementation of the Health insurance scheme by remitting the State Government 75% share etc”, he added.
While recalling 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, the Commissioner said it was a timely intervention that will assist the State to meet its huge infrastructure needs in critical sectors across Health, Environment and Roads, among others.
Dr. Olowo also informed that the Debt Management Office has been upgraded by the present administration into a full-fledged semi-autonomous Unit headed by a Permanent Secretary to promote Governance, Efficiency and Controls in the management of the State’s Debts.