Lagos State Government has announced that it had an Internally Generated Revenue (IGR) of N127 billion in the first quarter of 2021.
The government added that the amount was an increase from the N658bn it generated as of December 2020.
The disclosure was made by the Lagos State Commissioner for Finance, Dr Rabiu Olowo, in Ikeja, during 2021 Ministerial Press Briefing in commemoration of the Second Year in Office by Governor Babajide Sanwo-Olu.
Olowo expressed that the state was able to achieve this feat by being proactive in preventing and plugging leakages in the system despite the devastating effects of the coronavirus pandemic on the state’s economy.
He said; “We are also leveraging on technology to predict and prevent fraud by digitalising our processes.”
The commissioner added that the state’s debt sustainability ratio stood at 17.8 per cent.
Olowo pointed out that the achievement was not accidental, but rather, due to a well thought out strategy, partnerships and investments in technology.
He added;
Though the regulators – World Bank (for guidance) and Federal Ministry of Finance – put the sustainability ratio at between 30 and 40 per cent. This tells a lot about our ability to own and manage debts effectively; and 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 would ensure the economic success of the people now and in the future.
The Commissioner in his statement said;
Our revenue trajectory and the trend shows that Lagos is very different from others. A few years ago, our monthly IGR was about N800 million, but 15 to 20 years later, we are talking about billions.
Olowo noted that the government, through the Lagos State Employment Trust Fund, helped over 9,000 businesses in the last 18 months.
He further explained that the sustainability ratio means that the state pays back its loans as and when due, stressing;
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 State Government has been at the forefront of efforts of various states to look inwards and increase their internally generated revenue for economic growth as the country tries to move away from the over-reliance on oil.
According to a report from National Bureau of Statistics (NBS), Lagos State recorded the highest Internally Generated Revenue of N418.99 billion in 2020, accounting for 32.1% of the total internally generated revenue of N1.31 trillion by 36 states and FCT.
