2010 Budget Speech - Macro-Economic Framework

Y2010 Budget Of Consolidation

Nov 17, 2009 - Distinguished Ladies and Gentlemen, while a lot of work has been done in our attempt to bridge the infrastructure gap and a lot of projects, too numerous to mention will be completed before the end of this year and in the first and subsequent quarters of next year such as schools, health facilities, roads, water supply facilities and so much more. We believe that we are now at the most challenging phase of our journey to a bright and rewarding future.

For too long, we seem to have evolved survival strategies for dealing with chaotic and unplanned living that we now seem afraid to approach orderly living predicated on law and order.

We are at the point where we must build the most enduring infrastructure. This is the infrastructure of the mind. This is the infrastructure that empowers people to seek new levels of excellence that demands new attitudes that commits to greater ideals.

We recognise that while the buildings, schools and roads can be easily pulled down and rebuilt, the human mind is the most difficult to rebuild, although it is the most enduring.

We have decided to start with ourselves. We have inaugurated a Ways & Means Committee of the State Executive Council and Permanent Secretaries to begin to review how we have operated in the public sector and to propose changes from those things that make our work inefficient and improve on those that make it more efficient.

For us, it is a journey and we have found the courage to take the first step. We will require the understanding and support of all members of the public for whose benefit we exist and on whose behalf we exercise public trust. From time to time, we will be announcing changes to policies that will take us nearer our destination and we look forward to your endorsement and compliance. The truth and reality is that whenever there is voluntary compliance, the cost of governance is significantly reduced.

Against the background of the foregoing performance review of the Y2009 budget, common sense and economic realities dictate that the Y2010 budget must necessarily be a budget of consolidating the achievements of the last three years. Of course, Lagos does not exist in isolation and our budget will always be implemented within the context of global and national economic realities.

Some of the contending variables in this respect include the global economic recession from which the world is gradually emerging; the attendant impact on the price of oil, the mainstay of our economy; the implication for foreign investment in our economy and the reverberations of the global financial turmoil on critical sectors of our economy as reflected in the current crises in the banking sector and the stock market.

It is equally too early yet to predict the sustainable impact of the commendable post-Amnesty scenario in the Niger Delta on the country’s long term oil revenues or that of the proposed deregulation of the oil sector.

Taking all of these factors into account, we have predicated the Y2010 budget on a bench mark oil price of $50 per barrel, a state GDP growth rate of 8% and 20% interest rate on Naira-Denominated loans.

Despite prevalent macro-economic constraints, the state cannot afford to waver on its commitment to massive investment in infrastructure to create jobs, improve the investment climate, alleviate poverty and sustain economic recovery and growth. The conventional wisdom being demonstrated across the globe is that massive public sector spending on infrastructure is a critical factor in lifting distressed economies out of recession.

We intend to continue along the lines to maintain social equilibrium and keep the economy going with a focus on completing the existing projects. Against the background of the already stated global and domestic pressures on public revenues, we will necessarily in Y2010 place greater premium on Public Private Partnerships (PPP) as a viable option for funding infrastructure expansion and renewal.

Luckily, the awareness dawns on us more acutely everyday that the contemporary world is indeed a compact global neighbourhood.

Therefore, in different parts of the world in which I have been privileged to interact with key public and private sectors leaders, there is a consciousness of the strides we are taking in Lagos State and the eagerness to key into the immense investment opportunities being thrown up. Of course, this is not because anyone wants to do us a favour but it is in the nature of highly mobile global finance capital to move to areas of potentially higher return on investment.

It is therefore our collective responsibility and challenge to reiterate, at every point, to prospective investors the incomparable advantages of helping to transform our infrastructure challenges into profitable economic opportunities in diverse sectors including rail, road and water transportation; housing and real estate development; environmental renewal and waste management; recreation, tourism and hospitality as well as water and power supply to name a few.

However, we also realize that our salvation lies within our hands and our State through the PPP Office will take the lead in promoting a Nigerian owned economy.

Our history has shown that we have not owned enough of the business opportunities that exist here and we have kept so much investible capital in Europe and other western economies to our detriment.

We will therefore be promoting investment portfolio opportunities for Nigerians in many of our developmental projects through the PPP Office as a way of diversifying investment choices beyond the traditional basket. We are convinced that this is time to bring back all that capital to work in this economy for our people.

Y2010 Budget Goals And Objectives

We remain optimistic and confident that, despite the current dismal global economic scenario, Lagos is firmly on the path to becoming a major economic success story of our time and the Y2010 budget is a critical bridge to the attainment of this goal. Accordingly, the following key goals and strategies will drive the 2010 budget:

• Aggressive Revenue Generation

• Completion of on-going infrastructure projects

• Maintenance of existing Infrastructural facilities and public utilities

• Human Capital and Institutional reform in the State’s Civil Service

• Mitigation of global warming through greening, beautification programme and other Initiatives

• Teachers’ welfare enhancement

• Enhancement of Community based Vocational Education

• Sustenance of the State’s Free Healthcare Services

• Assistance/Empowerment of Farmers/Fishermen for food production and processing

• Expansion/Construction of new water Schemes

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