Lagos Revenue high, hits 106% unique feat in one year amid COVID-19 challenge

Inspite of the biting effects or world revaged pandemic of COVID-19, Lagos State government in the year under review realized an unusual percentage of revenue generation of 106% in its perfomance at the first quarter.

This was made possible through prudent management of resources, pro-activeness, due process and provisions for any eventualities.

It also gave an opportunity to perform more even with the prevalent world ravaged pandemic of COVID-19, through re-focussing, re-directing, re-designing and re-addressing the perfomance indices to soothe the present realities.

The combination of the good leadership led by the State governor, Babajide Sanwo-Olu along with an experience team expert in financial Management and the current Commissioner for Finance, Alhaji Rabiu Olowo Onaolapo speak volumes in the enhancement of perfomance indices of Lagos State.

In this vein, one year in office by the current administration under the indefatigable pilot of Governor Sanwo-Olu is laced with geometric progression.

With the pandemic and its effects which led to slight drop in states IGR, Federal allocation, foreign direct Investement (FDI), with increased pressure on the income and purchasing power of Lagosians, the re-ordered, rejigged and re-prioritised year 2020 budget had further enliven the current Government expenditures

“Although,with the direct impact of the pandemic, it 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 Year 2020 Budget and re-prioritised its Capital Expenditure to reflect current realities.”

Finance Commissioner, Dr Rabiu Olowo said it became possible for the quantum overshot of revenue expectations to 106% because of strict compliance to government policies as directed by the state government.

With the devastating effects and consequences of the world ravaged pandemic, dwindling oil prices, Lagos State government pro-activeness ensure a well thought out review of 2020 budget in tandem with the current realities.

“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 Year 2020 Budget assumptions.”

This is also in addition to other strategies by the state government to mitigate and serve as temporary measures that will not affect the smooth running of government business during the pandemic.

“Apart from the re-ordering of the Year 2020 Budget, the government has also initiated and adopted some other strategies to manage the impact of the pandemic.”

This was achievable through a comprehensive review of MSME’s loans to include principal and interest moratorium, Lagos State Employement Trust Fund (LSETF), Extension of Tax Filling, provision of dedicated funds for Management of COVID-19, increment and payment of hazards allowance, special peril insurance for frontline health workers and volunteers, to encourage perfomance and dedication to duty.

“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.”

The state government aside new strategies restructure through down ward review from 18%, 20% to 14% to attract cash flows in the state economy and huge savings on loans repayment and commitment of the state

“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.’

Despite the biting economic situation occassion by the pandemic, the need to jerk up the revenue base was desiring, hence a number of measure was adopted such as Focus on Revenue Creation Everywhere (FORCE), meant to monitor, review and ensure rapid and workable innovations along with providing E-Tax platform to ease payments and remittance on tax matters and administration.

“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.”

Lagos State government also diversify as a measure to sustain the economy of the state post COVID-19 automation of the operations of Lagos State Lottery Board along others to stabilize the revenue base to enable the new Lagos State fund infrastructure, provide social services and, create jobs and relive the economy.

‘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.’

Another outlets was in the area of the current reforms on Land Use Charge(LUC),geared towards optimum perfomance,so as to address agitations and reduce financial pressure on citizens,as government decision will be on the same page with the citzens by reverting to the pre-2018 upward review.

‘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.

He says under the Sanwo-Olu administration, partnering of the finance Ministry with others and MDAs had been robust that ensured people oriented policy formulation,and exectuon as a Credible Financial Partner’ (CFP).

“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”.’

This is achieved through the implementation of the 30,000 minimum wage, employers Contributory pension, retirement benefits, capital projects analysis, PPP arrangements, 8,000 capacity hostel for Lagos State University, implementation of Health insurance scheme through remittance of 75% share among others

“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’s 75% share etc.’

The state government efforts include signing up in January the largest bond in subnational entity in the country, amounting to 500 Billion bond issuance Programme as 100 Billion had been assessed, meant to achieve infrastructural breakthrough, both in Health, Raods, Environment among others.

‘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.’

To guarantee efficiency and management, Lagos State government had upgraded the debt management office to semi-autonomous unit to be headed by a Permanent Secretary to promote governance, efficiency and controls of the new office.

“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 Debt.’

This is an encouragement of public service and its employees, having achieved so much in one year of office.

Abubakar Yusuf writes from Abuja