Lagos State has reduces 2020 budget by 21 per cent due to the adverse effects the COVID-19 pandemic has had on the economy.
The state commissioner for economic planning and budget Sam Egube, who made this known on Thursday at a briefing.
He said the budget would be reduced to N920.5 billion against N1,168.6 trillion, hitherto approved by the State House of Assembly.
Recalls that the Lagos Assembly passed N1.169 trillion as the 2020 Appropriation Bill for the state.
Egube said the deficit in the revised budget, if approved, was expected to increase slightly by 11 per cent, from N97.533 billion to N108.005 billion.
He said, recurrent expenditure would decline by 10 per cent from the initial N457.529 billion to N411.608 billion, while total capital expenditure would be reduced by 28 per cent, from N711.33 billion to N508.861 billion.
He revealed that the first quarter of 2020 recorded a budget performance of 56 per cent (N163.28 billion), which was higher than the 68 per cent (N148.38 billion) recorded for the same period in 2019.
The commissioner, listed other factors to include the decline in demand for goods and services, as well as a reduction in manufacturing activities which he said indicated lower GDP growth and increased unemployment.
Outlining some of the factors that necessitated the review of the 2020 budget, the Commissioner listed the damaging effect of the fall in crude oil prices on statutory allocation expectations; the downward pressure on Internally Generated Revenue; devaluation of the Naira; reduced public and private investment; and increased inflation, as reasons for the overhaul of the projected figures.
While stating that the recurrent expenditure (Debt and Non-Debit) in the revised budget will decline by 10 per cent from N457.529bn to N411.608bn, Egube stated that 28 per cent reduction has been proposed for Total Capital Expenditure from N711.033bn to N508.861bn
“The revised Total Revenue represents a drop of 24% in the previous projections from N1,107.029bn to N812.46bn,” he added.