2010 Budget Speech - Proposed Y2010 Budget

Y2010 Budget Of Consolidation

Nov 17, 2009 - Mr. Speaker and distinguished members of the House, it is my pleasure and honor to formally present to you highlights of the Y2010 Budget, which as I earlier hinted is aptly tagged BUDGET OF CONSOLIDATION.

The Y2010 budget will ensure the completion and consolidation of all on-going projects/programmes while only viable new initiatives will be undertaken. For this purpose the budget has been prepared on the basis of a Medium Term Expenditure Framework. The over all budget size for 2010 is N429.596 Billion which represents an increase of 5.3% over the Y2009 budget.

Highlights of Y2010 Budget

The Total Revenue projection of the Y2010 budget is estimated at N307.027 billion. This comprises Internally Generated Revenue (IGR) estimate of N204.000 Billion; Dedicated Revenue estimate of N20.027 Billion; Federal Transfer projection of N78 Billion and Extra-Ordinary revenue estimate of N5 Billion.

Recurrent Expenditure is estimated at N178.818 Billion made up of Total Personnel Cost of N55.079 Billion and Total Overhead Cost of N123.739 Billion.

The detailed components of the Total Overhead Cost are broken down as follows:

• Overhead Cost - N67.002 Billion
• Subventions - N18.977 Billion
• Transfer to other funds - N0.050 Billion
• Public Debt Charge – N17.683 Billion
• Dedicated Expenditure – N20.027 Billion

Capital Receipts for the Y2010 Budget is estimated at N28.372 Billion and this is composed of the following sub heads:

 Other Capital receipts - N23.101 Billion
 Matching Grants - N5.021 Billion
 Investment Income - N0.250 Billion

The Budget has a Capital Expenditure Estimate of N250.778 Billion with the following components:

 Core Capital - N209.207 Billion
 Capital Development - N22.804 Billion
 Matching Grants - N5.021 Billion
 Counterpart Funding - N5.246 Billion
 Special Expenditure - N8.500 Billion

The sectoral demarcation of the Y2010 budget has been aligned to the standardized format set by International Development Agencies such as the World Bank and the IMF. The sectoral allocation of the budget is as follows:

 Public Order and Safety - N10.550 bn (2.46%)
 Education - N60.041 bn (13.98%)
 Health - N30.219bn (7.03%)
 General Public Service - N105.607 bn (24.58%)
 Economic Affairs - N145.160 bn (33.79%)
 Environmental Protection - N28.710 bn (6.68%)
 Housing and Community Amenities - N36.917 bn (8.59%)
 Recreation, Culture and Religion - N9.375 bn (2.18%)
 Social Protection - N3.018 bn (0.70%)

Broad Policy Thrusts

Embedded in these sectoral figures and the attendant percentages are certain distinct policy thrusts and initiatives, which must be clearly enunciated for a better appreciation of the budget.

First and foremost as I had earlier stated is a commitment to ensuring that no project or programme is abandoned while managing the State’s finances for optimum benefit to the populace.

Again, our emphasis in the maintenance of public order and safety goes beyond simply combating crime to taking more people off the streets by creating jobs, alleviating poverty and reducing the desperation that feeds crime.

We are already reaping in this budget the benefit of our previous massive investment in key agencies and sectors. Our sustained investment in agencies such as the Lagos State Waste Management Authority (LAWMA), Lagos State Water Corporation (LAWC), and the Lagos State Advertising Agency (LASAA) has enhanced their capacity to run on their own strength therefore actually reducing overhead costs on these agencies in the Y2010 budget.

The benefit is that we are able to shift the strategic focus in the funding of our environmental renewal efforts to awareness campaigns for attitudinal change that address the root causes of environmental degradation.

Furthermore, the sectoral allocation reflects the immense success we have recorded in our Public Private Partnership Schemes in different areas including the waste to wealth projects, the site and service schemes of the New Towns Development Authority (NTDA) and the development of new housing schemes by the Ministry of Housing.

The injection of private sector funds in these key sectors has reduced the need for direct government funding thus enabling much more objectives to be achieved outside the budget. But for these initiatives, we would have been confronted with the unavoidable imperative of a larger budget size with the attendant challenge of funding capacity.

We are also placing greater emphasis in the Y2010 budget in improving the quality of life in our rural areas particularly through Agriculture based micro-finance funding under the existing framework of the Lagos State Micro Finance Initiative (LASMI).

The objective is to boost the rural economy, create rural based employment and encourage more people to stay within their environment, which will enjoy greater local economic buoyancy. Another unique feature of the budget is our creation of a special grant for scientific research and development to encourage local talent particularly in our higher institutions and help evolve home grown solutions to our peculiar challenges.

One of the most critical initiatives of this budget is the creation of investment incentive packages to boost economic growth and mitigate the liquidity crunch in the economy. This basket of incentives will include bringing down some of our rates to reduce, for instance, the cost of land transactions, planning fees and mortgage rates with a view to stimulating domestic investment both locally and through the repatriation of funds from the diaspora.

An important component of the incentive package is in the area of real estate where we have now made it possible for legal occupants of housing estates in the State to possess legal title deeds and not just letters of allocation.

With these documents, poor and middle class citizens can now have access to the requisite collateral to raise credit, plan their future and lift themselves out of poverty. In the next weeks and months to come over 20,000 units of housing occupied by our people will be issued these title deeds.

Our slashing of mortgage rates and reduction of professional fees will facilitate this process of democratising access to credit and phenomenally expanding opportunities for wealth creation.

Mr. Speaker, Honourable members, a necessary condition for achieving the objectives of this budget and indeed that of Lagos State as a Model Mega City is the renewal of the soft infrastructure of the hearts and minds of our people.

There is a set of habits, orientations and attitudes necessary to maintain not only the physical infrastructure but the very idea of civilized co-existence in a modern community. Unless a critical mass of the population instinctively imbibe these qualities, society will ceaselessly degenerate to chaos and anarchy. This is why we are committed to initiating and sustaining massive attitudinal re-orientation campaigns to back up our on-going radical modernization of infrastructure and social service delivery in Lagos State.

One of the areas which such awareness campaign will focus on in the next budget cycle is that of deliberate population control as a necessary mechanism of poverty alleviation. We have now reached a stage where it is no longer avoidable to ask how many people Lagos State can meaningfully employ and sustain.

Our State is faced with a daily influx of people from all over the country who want to take advantage of the opportunities of an economy that works. But the reality is that persistent uncontrolled population growth worsens the problem of poverty and negates Government’s efforts to improve the quality of life for majority of the people. As individuals we therefore cannot claim the right to procreate without limit.

Unless individuals exercise self restraint by properly spacing and limiting the number of their offspring, unduly large families become an unbearable burden on the entire society. This is an issue that we must frontally confront and which I will continue to address in greater detail in the days ahead.

I am happy to announce that we are also in the closing phases of concluding the Residents identify card scheme that will increase our capacity to plan the delivery of social amenities to our people.

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