2021 Budget: Lagos state looks to rekindle hope

Lagos state has set the stage for its economic recovery and development with the unveiling of its 2021 budget, themed 'Budget of Rekindled Hope'. The budget, valued at an impressive 1.64 trillion Naira, aims to address the challenges posed by the COVID-19 pandemic while positioning the state for sustainable growth. In a recent interview with CNBC Africa, Sam Egube, Lagos state's Commissioner for Economic Planning and Budget, shed light on key aspects of the budget and the strategies in place to fund the deficit and prioritize essential projects. The government is set to fund the 192.49 billion Naira deficit through a combination of internal and external loans. Egube highlighted the restructuring of existing loans and the issuance of bonds as part of the funding strategy, with plans to raise funds from both local and international sources. Capital expenditure remains a key focus for Lagos state in 2021, with a significant allocation of 702 billion Naira towards infrastructure development. This represents a 60-40 split in favor of capital expenditure, indicating the state's commitment to driving growth through strategic investments. The budget also prioritizes human capital development, with a substantial increase in funding to support initiatives aimed at empowering women, alleviating poverty, and creating employment opportunities. Notably, the agricultural sector will receive a boost with a budget increase from 14 billion to 20 billion Naira. Lagos state is keen on strengthening its food security mechanisms in the wake of the pandemic. Small businesses, which form the backbone of the economy, will receive critical support from the government through various interventions. This includes access to funding, improved infrastructure, and technical education programs to enhance the capacity of entrepreneurs. The state is also focused on creating an enabling environment for small businesses to thrive, with measures such as tax incentives and simplified processes. In addition, the government plans to engage the youth through sports development programs and community initiatives aimed at fostering growth and empowerment. Addressing concerns over the state's debt stock, Egube reassured stakeholders of Lagos state's strong financial management practices. Despite taking on additional borrowings, the state remains well within sustainable debt levels, with a debt-to-revenue ratio of 19%. The government is committed to prudent financial management and has successfully negotiated favorable loan terms to mitigate risks. By driving down borrowing costs and strategically managing debt, Lagos state is poised to navigate economic challenges and deliver on its development agenda. As Lagos state charts a course towards economic recovery and sustainable growth, the 2021 budget signals a renewed commitment to building a resilient and prosperous future for its residents. With a focus on infrastructure development, human capital empowerment, and support for small businesses, the state is laying a solid foundation for inclusive growth and development.