Lagos possesses capacity to finance budget deficit — Commissioners

The Lagos State Government, on Friday, said it has a very good performance initiative to generate more money to address its budget deficit estimated at ₦398.662bn.

Recall that Governor Babajide Sanwo-Olu’s administration budgeted a whopping ₦3.367 trillion for the year 2025.

The State Commissioner for Economic Planning and Budget, Mr Ope George, and his counterpart, Commissioner for Finance, Abayomi Oluyomi, said this at a press briefing held at the Bagauda Khalto Press Center, Alausa, Ikeja to analyse the year 2025 budget.

George, while noting that the approved budget is ₦3.367 trillion, comprising ₦2.071 trillion for Capital Expenditure and ₦1.295 trillion for Recurrent Expenditure, including Debt Charges, establishing a Capital to Recurrent ratio of 62:38, emphasised the budget’s strong dependence on revenue.

According to him, the total revenue estimate was ₦2.968 trillion, with a deficit-funding requirement of ₦398.662bn, which represents 13 percent of the total revenue.

“We believe that there are huge revenue-generating opportunities in the informal sector, tourism, real estate, transportation, and trade.

“The deficit of ₦398.662bn is projected to be funded by internal, external loans, bond issuance, and others,” he said.

Shedding more light on the focus of the state government on the budget, George said the budget was not just a fiscal document but structured around providing economic stability, environmental stewardship, and social equity to ensure that Lagos continued to thrive sustainably for generations to come.

The commissioner explained that the budget was hinged on infrastructure sustainability, environmental sustainability, economic diversification, social inclusion, and human capital development.

He stressed that the focus of the state government was prioritising the maintenance, upgrade, and expansion of existing road networks and furniture, construction of bus terminals, jetties, bridges, rail systems, housing units, and digital infrastructure.

Besides, he said the focus was to ensure the durability, functionality, and adaptability of the state’s physical assets to meet the ever-growing demands of the people, hence the investment of the sum of ₦1.052 trillion, representing 31.27 percent of the entire budget on infrastructure.

On environmental sustainability, George said the budget, with a sum of ₦287.241bn (8.5%) on environmental protection for key projects, including the construction of drainage infrastructure across the five IBILE divisions to mitigate the impact of climate change, underscores the state government’s commitment to environmental protection and sustainability.

Also speaking, the State Commissioner for Finance, Oluyomi, equally affirmed that the management of debt was sustainable as, according to him, the state had very good performance initiatives to generate more revenue through creative financing options that would not translate to debt.

“The deficit financing may not be a deficit, we may not borrow money,” he said.

He explained that the focus of the government was to deliver on what the state governor, Mr Babajide Sanwo-Olu, had promised the people of the state.

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