Lagos State Government on Thursday said the Internally Generated Revenue (IGR) in the first quarter was N127 billion which was an increase from the N658 billion realised as at December 2020.
Commissioner for Finance Rabiu Olowo stated this when he addressed reporters as part of activities to mark Governor Babajide Sanwo-Olu’s second year in office.
Olowo said the state was able to achieve the feat despite the biting effects of the COVID-19 pandemic because it is proactive in preventing and blocking leakages.
He said: 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 on technology to predict and prevent fraud by digitalising our processes.”
The commissioner stressed that the state’s debt sustainability ratio presently stands at 17.8 per cent, even when regulators say the ratio should be 30 and 40 per cent. This, he said, means the state pays back its loans as and when due.
He said: “Debt is very good, especially for a mega city 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; how much debt do you have and how does it compare 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, though the regulators – World Bank (for guidance) and Federal Ministry of Finance -put the sustainability ratio at 30 and 40 per cent. This tells a lot about our ability to own and manage debts effectively; and 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 would ensure the economic success of the people now and in the future.”
Olowo added that the government, through the Lagos State Employment Trust Fund (LSTF), has helped over 9,000 businesses in the last 18 months, especially in the aftermath of COVID-19 and EndSARS protests. He added that the government achieved 88 per cent budget performance in 2020.
The commissioner also gave an account of the N100 billion bond issued in January 2020. He said: “The N100 billion bond issued in January 2020 is performing well; it is at about 85 per cent utilisation stage. Projects are ongoing, and people have described Lagos as a construction site as every part of Lagos is enjoying infrastructural changes, especially in terms of rail, road, housing and school projects. Within this week, we have celebrated over a thousand interventions in schools.”
Olowo also harped on the state’s strategy for generating revenue, saying: “Our revenue trajectory and trend shows that Lagos is very different from others. Few years ago, our monthly IGR was about N800 million, but 15 to 20 years later, we are talking about billions. This is not accidental, but as a result of well thought out strategy, partnerships and collaborations with institutions, and investments in technology. “Many firms have helped us to ensure our revenue is optimised, block leakages, and we continue to make good use of our partnerships. Lagos is the only state not complaining despite effects of the pandemic; we are not giving excuses of the pandemic as our revenue is going higher. This is not because everyone in Lagos wants to or even pay tax, but because we have the controls, oversight, and strategy right, and we will continue to do that.”