Lagos Debt To Hit Alarming N700bn By End of Year

By Fola James

The Lagos state government has disclosed that it will borrow a whopping N192.494 billion to fund the 2021 budget. Governor Babajide Sanwo-Olu had after signing the N1.16 trillion budget, two weeks ago, said it will be financed from internal and external loans.

The borrowing will effectively increase the state’s debt stock to over N700 billion, watchers of the Center of Excellence said.

According to the state state’s Commissioner for Economic Planning and Budget, Samuel Egube, who spoke to the media while presenting 2021 budget, the borrowed funds will be tied to specific projects that will be beneficial to the people of the state. The state government said its debt is still below the 40 per cent thresh hold set by the federal government and other international development partners.

The state has been criticized for being the highest borrower among the 36 states in the country. The Debt Management Office, DMO in its 2019 report said Lagos sits atop the list of debtor states after incurring a total of over N513 billion out of the  N1.043 trillion total debt stocks of the 36 states and FCT.

Egube who gave a breakdown of the budget said the total revenue estimate is N971.02 billion, consisting of internal generated revenue , IGR of N723.81 billion; capital receipts (N71.81 billion); and federal transfer of N175.40 billion.

He said, “The Lagos 2021 budget is made up of N702.93 billion for capital expenditure and N460.49 billion for recurrent expenditure, implying 60:40 capital to recurrent ratio against 2020 budget which was at 55:45 capital to recurrent ratio.

“The breakdown of Lagos recurrent expenditure shows that total personnel cost (N168.72 billion); total overhead costs (N260.07 billion); and debt charges (N31.87 billion).”

While signing the financial estimates approved by the state’s house of assembly tagged  “Budget of Rekindling Hope,” penultimate week, Governor Sanwo-Olu said  the sums of N703.23 billion has been allocated for capital expenditure while N451.75 billion for recurrent expenditure.