Lagos to run deficit budget in 2010

Kunle Awosiyan, Lagos - 01.07.2009

LAGOS State Government will be running a deficit budget in 2010, the state Commissioner for Economic Planning and Budget, Mr. Ben Akabueze, has said.

He said this while giving a brief overview of the 2009 budget and 2010 projection at the Adeyemi Bero Hall, Alausa Secretariat on Tuesday.

According to him, the state government is currently running a deficit budget for the 2009 fiscal year because of the huge number of projects it must implement, adding, “there is nothing we can do than to borrow money to finance these projects. We will spend more than what we have budgeted for to implement our projects.”

Akabueze however, posited that the 2010 budget would not be different from the 2009 because of the current global economic recession, which is seriously affecting the country’s economy, including that of Lagos State.

He said, “We will borrow money. As a matter of policy, we will not use borrowed money other than spending it on capital project. We will also ensure that the deficit budget is not more than three per cent of the state Gross Domestic Product (GDP).

According to the commissioner, the World Bank projections indicate there will be relatively little or no changes in the world economy despite bailouts, adding, “Nigeria’s economy will be defined by weak global energy prices, which will probably oscillate around $50.00.”

He said that the continued low oil outputs would predominate as Niger Delta crisis persists, causing a contraction in the amount of available grants and loans from external sources.

This, according to him, will affect Lagos state, which derives about N57 billion of its budget as Federal Government transfers in form of statutory allocations and Value Added Tax.