The Commissioner for Economic Planning and Budget, Lagos State, Mr. Ben Akabueze, has said Lagos State requires an investment of $50 billion in ten years to address its infrastructural challenges.
The Commissioner explained that the investment, which will spread over a decade, would involve private sector's involvement to raise the $50 billion investment.
Akabueze, during the 2013 Seminar of the Financial Services Group of the Lagos Chamber of Commerce and Industry (LCCI) tagged ‘Budget Implementation and its impact on the Economy’, stressed the value of private sector's participation in infrastructural development, maintaining that according to a World Bank study, there is a positive correlation between investment in infrastructure and economic growth.
“According to World Bank, if we improve our infrastructural facilities, our Gross Domestic Product (GDP) growth rate will increase by 2.5 per cent per annum," he said.
He stated that investment infrastructure tackles a number of challenges hindering the growth and development of any nation. He however stated that Lagos State has consistently recorded good budgetary performance more than any other state or federal government in the country.
“Although the State requires a much larger budget than it currently operates. Inadequate revenue constitutes the principal impediment to achieving a larger budget,” he said.
He pointed out that an effective budgetary system and implementation have contributed significantly to socio-economic development in Lagos and the nation at large.
Also speaking at the event, President, LCCI, Mr. Goodie Ibru, said the budget is an instrument which articulates government spending plans for pursuing and delivering economic development objectives.
He pointed out that approximately 70 per cent of total spending in the Nigerian economy is tied to the public sector, making government budget an indispensable driver for the private sector.
He also noted that late submission of budget proposals by the executive arm of government to the national assembly, and extended deliberation periods by legislators, may be largely responsible for delayed budget approvals.
“Over the past decades, we have hardly seen budget implementation at the federal level commence in January of any fiscal year. In fact, it is difficult or nearly impossible for private sector operators to accurately forecast when the annual government budget will be approved,” he said.
He added that unpredictable budget approval timelines makes planning difficult and causes inefficient allocation of resources in the economy.
He said recent findings by the probe panel of the House of Representatives Committee on budget and appropriation revealed that less than 45 per cent of the capital component of the federal government budget was implemented over the past 10 years.
“The private sector relies heavily on the federal government budget to take decisions on critical investment and financing decisions. Beyond infrastructure deficit, weak institutions and corruption, budget delays and poor implementation of government budget are increasingly inhibiting productivity and private sector growth,” he said.
Chairperson of the group, Mrs. Olajumoke Fashanu, said budget implementation has become a major challenge at different levels of governance in Nigeria, stating that the case of the federal government was quite pertinent considering the fact that over 50 per cent of national revenue is spent at the federal level.
She pointed out that key implementation challenges include approval delays, extra budgetary spending, procurement problems and poor revenue collection and remittance.
"In addition, monitoring of budget implementation has been weak and spending agencies are not held accountable for delivering output with funds allocated to them. This has constituted a weak link in the budgeting process, resulting in a low rate of performance and inability of the government to achieve most of its target development goals and objectives," she said.