Is Sanwo-Olu’s N2.2trn 2024 Budget Too Ambitious?

In a bid to rejuvenate and transform Lagos State, Governor Babajide Sanwo-Olu has proposed a whopping N2.24 trillion budget for the 2024 fiscal year, aptly naming it the ‘budget of renewal.’ This budget, while aiming to usher in a new era of prosperity for the state, has raised eyebrows and sparked a debate: Is Sanwo-Olu’s N2.2trn 2024 Budget too ambitious?

The size of this budget is undeniably substantial, dwarfing the 2023 budget of N1.326 trillion, which was signed into law for implementation in January 2023. The 2024 budget is structured with a capital expenditure allocation of N1.22 trillion, constituting a significant 54.40 percent of the total, and recurrent expenditure of N1.02 trillion, encompassing personnel costs, overheads, and debt servicing.

Lagos State’s projected revenue amounts stand at  N1.847 trillion

Governor Sanwo-Olu’s optimism for the fiscal year ahead is built upon the foundation of projected revenues, which stands at N1.847 trillion. This includes revenues from Internally Generated Revenue (IGR) and allocations from the federal government. The state expects to generate approximately N1.251 trillion from IGR, while the Federal Allocation Accounts Committee (FAAC) allocation is estimated to total N596.62 billion in 2024.

Governor Sanwo-Olu, during his presentation to the State House of Assembly at Alausa, acknowledged the challenges faced by Lagos State and the nation as a whole in 2023, particularly the record-high inflation that triggered a cost-of-living crisis. However, he perceives these challenges as opportunities for Lagos and highlights the achievements of his administration in key sectors such as infrastructure, healthcare, education, and transportation.

What to note

One notable aspect of Sanwo-Olu’s address was the mention that the 2023 budget of N1.326 trillion has seen a remarkable implementation rate of up to 78 percent, with the capital expenditure component achieving an impressive performance rate of 80 percent. This suggests that the government has a track record of efficiently utilizing allocated funds, which could bolster confidence in the feasibility of the ambitious 2024 budget.

Governor Sanwo-Olu also emphasized the state’s ongoing collaboration with the Federal Government, especially in mitigating the impact of the fuel subsidy removal. This collaborative approach, aimed at alleviating the economic burden on the people, is expected to continue into 2024.

The question of whether Sanwo-Olu’s N2.2trn 2024 budget is too ambitious remains at the forefront of discussions. While some may argue that such an enormous budget could strain the state’s resources, others see it as a bold step toward realizing Lagos State’s full potential. The key, as always, will be in prudent financial management and effective implementation of the proposed projects and programs.