2016 budget: Lagos lawmakers raise fears on N119bn deficit

By Lanre Adesanya

Lagos lawmakers are clearly perturbed, on how to shore up finances for the budget proposal laid before the House by Governor Akinwunmi Ambode, last week for its constitional ratification.

The N662.5888bn 2016 budget estimate though considered a visible projection, threw up a gulf, with lawmakers wondering how soon the state government would be able to shore up an additional N119bn balance required to fund the budget, given the total revenue estimate for 2016 fiscal year which stood at N542.873billion.

The Chairman House Committee on Finance, Oluyinka Ogundimu, related his fears, stating that to ensure  that the proposed budget got the kind of fund it deserved, the state government must look at ways to increase its Internally Generated Revenue (IGR), stating 60 percent of the budget would be financed through IGR.

Some of the lawmakers however reiterated the state Governor’s  stance on the matter earlier, that the N119bn of the budget would be funded through deficit financing constituting 0.41 percent of the state GDP.

The Speaker, Rt. Hon Mudashiru Obasa, said there was nothing wrong with the state to get loan to finance its capital projects so long it had a clear-cut plans of how the loan collected would be used.

The view was also corroborated by other lawmakers including Deputy Speaker, Wasiu Eshinlokun, and Saka Fafunmi, among others.

But Ogundinmu however pointed out that for the 2016 budget to perform optimally, it would require the proper implementation of the Bill on Wealth Creation if eventually passed into law.

He explained that to get enough IGR to finance 2016 budget, job creation would be paramount in order to have more people that would pay taxes.

Therefore, the Assembly subsequently committed the Bill to the House Committee on Finance and Job Creation, with a mandate to look into some grey areas for subsequent passage.

It will be recalled that the State Governor, Akinwunmi Ambode had forwarded the Bill on Wealth Creation to the Speaker, Mudashiru Obasa with a view to address the alarming rate of unemployment in the State.

The motion for the second reading of the Bill was moved by the Majority Leader, Sanai Agunbiade and seconded by another member, Bisi Yusuff.

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Leading the debate, the Chairman House Committee on Finance, Oluyinka Ogundimu, disclosed that the objectives of the Bill were embedded in section 2, adding that “it was meant to provide financial support for residents of the state on job creation.”

The fund, according to Ogundimu would be headed by a chairman and executive secretary Lagos lawmakers would be managed by Commissioner for Wealth Creation and his\her counterpart from Finance or their representatives.

Also speaking, the Chairman House Committee on Wealth Creation, Sola Giwa, said the essence of the Bill was to open up entrepreneurial skills of the people.

The two Committees, Finance and Budget, were directed to submit the report on December 31.