With an ambitious revenue projection of ₦991.03 billion by the end of 2021 and ₦60.31 billion monthly Internally Generated Revenue during the year, so much is expected from Lagos State’s revenue efforts in 2021 as recovery from the devastating economic effects of the Covid-19 outbreak and #EndSARS protest violence.
Without mincing words, the Lagos State Economic Team is already living up to the expectation of massive revenue harvest. This is more so with recent data from the just concluded first quarter, Q1 2021 report, highlighting that the commercial capital of Nigeria raked in the total sum of ₦127 billion in the period under view.
Unveiling the reason for this unprecedented achievement from a state that in time past had once declared the paltry sum of ₦800 million as revenue generated for the whole year, Dr. Rabiu Olowo, the state’s Commissioner of Finance in a recent Ministerial Briefing accredits this recent show of strength by the Lagos economy as the benefits of proactive policies and deliberate effort to plugging loopholes and leakages in the system.
A well-thought-out strategy, partnerships, and investments in technology are additional game changers put forward by experts in the economic team as lead by the Commissioner of Finance.
Roadmap to the outstanding feat
Recall that Taxmobile.Online had analyzed early into the year based on a report from the Lagos State government when highlighting targets for the year that figures projected have gone through a painstaking process of economic permutation, making them reliable.
In Dr. Rabiu Olowo’s words on the impressive run
Our revenue trajectory and the trend shows that Lagos is very different from others. A few years ago, our monthly IGR was about ₦800 million, but 15 to 20 years later, we are talking about billions.
This is not accidental, but as a result of a well-thought-out strategy, partnerships and collaborations with institutions, and investments in technology.
No institution or organization is immune to economic sabotage and leakages, but we are proactive enough to predict such sharp practices and minimize them. We are also leveraging technology to predict and prevent fraud by digitalizing our processes,” he said.
This is what you should know from the commisioner’s statement regarding Lagos Debt Status
Debt is very good, especially for a megacity status that Lagos wants to enjoy. The most important thing is debt management and one of the most respected metrics to measure debt management is the debt sustainability ratio.
This is to say how much debt do you have and how it compares with the revenue potential, your ability to pay. That is the most important thing for everyone to consider.
Lagos’s debt sustainability ratio is currently at 17.8 percent. This tells a lot about our ability to own and manage debts effectively.
As our revenue grows and we pay our debts, we will continue to take more loans so far they are used to provide capital projects that will ensure the economic success of the people, now and in the future.’
What you should know
Lagos state continues to be a beacon of hope to other states of the federation when it comes to massive IGR drive.
The above assertion is buttressed by data from the National Bureau of Statistics (NBS), where Lagos State is ranked the highest IGR with ₦418.99 billion in 2020, accounting for 32.1% of the total internally generated revenue of ₦1.31 trillion by the 36 states and FCT.
Lagos in time past has sought out both international and local loans as an addendum to its already existing revenue-generating mechanism. In this light, it is of necessity to point out according to the recent quarterly report that Lagos State’s sustainability ratio is put at 17.8% away from a ratio of 30% and 40% as recommended by regulators.
In economic terms, the sustainability ratio is aimed at measuring how the state pays back its loans in line with the time frame required to do so.
On a contrary note, it is pertinent to note that this positive update still falls short of its ₦60.31 billion monthly projection which should have reached the sum of over ₦180 billion per quarter.