LAGOS STATE GOVERNMENT
Y2015 Draft Budget
To The
State House of Assembly
Ministry of Economic Planning & Budget
25th November, 2014
OUTLINE
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Ministry of Economic Planning & Budget

Introduction
Y2015 Budget Objectives/Fiscal Strategy
Y2015 Budget using PBB Approach
Y2014 Budget and its Performance as at the end
of Q3
EXCO Approved MTBF
Macro-Economic Assumptions
Y2015 Budget Proposals
Conclusion
2
INTRODUCTION


Y2015 budget is the Final Budget in the life of the present
Administration and aimed at further consolidating its landmark
achievements
Ministry of Economic Planning & Budget
The Y2015-Y2017 Medium-Term Budget Framework (MTBF) was
approved by the State Executive Council at its meeting held on
Monday, 7th July, 2014


The MTBF Y2015-Y2017 projected a Budget Size of N514.175bn for
Y2015, but upon approval EXCO directed that we retain the Y2014
Budget Size of N489.690bn , with no deficit
EXCO also approved marginal increases in allocations to Public Order &
Safety, Housing & Community Amenities and Economic Affairs Function
Groups

The Planning and Contingency Reserves were also reduced
to 1% from the 2.5% proposed in the MTBF
3
INTRODUCTION……/2
 Function
Disaggregation approved by EXCO reflected
Government priority on Power , Agriculture, Transportation
and Housing (PATH)
Ministry of Economic Planning & Budget

Intra-Functional Disaggregation meetings/ negotiations
within the Nine (9) Function Groups were held to drive
resource allocation to MDAs
 Guiding
principles of the current year’s Budget (i.e.
Y2014) in the areas of Payment of Outstanding
Liabilities, Completion of all on-going Projects and
Maintenance of Public Infrastructure were also
sustained
4
Y2015 BUDGET OBJECTIVES
State
Ministry of Economic Planning & Budget
Economic Policy thrust remains
“Poverty Eradication and Sustainable
Economic Growth through Infrastructure
Renewal and Development”
 Consolidating
the Medium Term Sector
Strategy(MTSS) approach through the adoption of
the Program Based Budget (PBB)
 Sustenance
of the Goals of Job Creation
5
Y2015 BUDGET OBJECTIVES…./2
Poverty
Ministry of Economic Planning & Budget
eradication and wealth creation
Ensuring effective and efficient service
delivery to the entire citizenry of Lagos
State
Support for Private Sector to create job
opportunities, and
 Improvement of general well being of our
citizens
6
Y2015 BUDGET :FISCAL STRATEGY
 Setting
the Y2015 Expenditure at sustainable level,
especially in view of declining Federal Transfers
 No
Deficit Financing allowable for Y2015 Budget
Ministry of Economic Planning & Budget
 Effective
and Efficient Tax Administration (Assessment,
Collection and Enforcement)
 Maintaining
the Capital: Recurrent Expenditure ratio in
the Policy Range of 60-50% (Capital) and 40-50%
(Recurrent)
 Keeping
Total Public Debt at sustainable level; and
 Promoting
non-oil growth and expansion of Revenue base
7
Y2015 BUDGET USING PBB APPROACH
Year 2015 Budget was prepared using the Programme Based
Budget (PBB) approach, alongside the existing Legacy
templates
ii.
PBB is a systematic approach to planning of Public
Expenditure towards achieving clearly defined results, policy
objectives or routine services
iii.
It is based on Programme budget structures which consist of
breaking functions into programmes and developing a
template to capture the cost of each programme
iv.
It ensures that each programme has an organic link to the
broad policy goals of the sector
Ministry of Economic Planning & Budget
i.
8
Y2015 BUDGET USING PBB APPROACH…/2
Each programme is a cluster of activities that are
mutually exclusive, i.e., no duplications
vi.
There are 15(fifteen) maximum programmes
made up of 6(six) Generic ones common to all
MDAs while;
Ministry of Economic Planning & Budget
v.
vii. The
remaining 9(nine) allow MDAs room to reflect
their core mandates and activities, which at a later
stage can be broken down into a maximum of 12
(twelve) sub-programmes
9
BENEFITS OF USING PBB APPROACH
 PBB
is a Plan-Led System linked with State Development Plan/Sector
Strategies as against existing Budget-Led system which is less robust
and not as clearly linked to Policy Objectives
is aimed at building greater transparency, accountability and
comprehensiveness into the budget process by facilitating tracking of
expenditure, monitoring and evaluation in line with policy goals
Ministry of Economic Planning & Budget
 It
 It
provides a better basis for monitoring and evaluating outputs on
Annual basis
 Core
Programmes were developed for MDAs and bilaterally agreed as
listed in Annexure XII
 Present
departmental/directorate structure of MDAs not affected by
the PBB approach
10
CHALLENGES OF FULL IMPLEMENTATION OF PBB APPROACH
 Inability
to complete and configure the new Chart of Accounts
into the Oracle System before the Preparation of the Y2015
Budget commenced
of Chart of Accounts with Budget Classification
 Scheduled
Upgrade of Oracle Applications, including migration
of PSB to Hyperion not yet implemented
 As
a result, MDAs were requested to upload their Y2015 Budget
using the existing seven segment Chart of Accounts (Legacy
Template)

Financial Systems Mgt. Bureau (FSMB) however assures that
migration to PBB on Oracle would be hitch-free upon
completion of the upgrades
11
Ministry of Economic Planning & Budget
 Integration
Y2014 REVISED BUDGET AND ITS PERFORMANCE AS AT THE END OF Q3
Details
Actual
(Jan-Sept)
N’bn
Perf.
%
Ordinary Revenue
349.880
292.860
84
Total Capital Receipts
17.388
177.799
19.311
168.547
111
i. Personnel
66.016
63.155
96
ii. Overhead
111.783
105.392
94
Total Recurrent Surplus
172.081
189.469
124.313
72
145.622
77
Total Recurrent Expenditure
Total Capital Expenditure
Financing – Surplus/(Deficit)
Budget Size
-
367.268
(1.998)
314.169
Ministry of Economic Planning & Budget
Revised Prov.
Pro-rated
(Jan-Sept.)
N’bn
95
86
NB Performance as published in Y2014 Q3 Budget Appraisal
12
Y2015 BUDGET PROCESS
Major Revenue Generating Agencies provided inputs into Y2015 –Y2017 Fiscal
Strategy -13th May, 2014

Y2015 –Y2017 MTBF approved by EXCO -7th July, 2014

Half-Year Budget Performance Appraisal - 22nd July, 2014

Budget Consultative Forum held to obtain stakeholders inputs into Y2015
Budget -30th July, 2014

Intra-Functional Group disaggregation supervised by COFOG Champions - 5th 7th August, 2014

Ministry of Economic Planning & Budget

Bilateral discussions held with MDAs(Programmes and Projects not
accommodated within envelopes were compiled for STB/EXCO consideration)1st to 17th Sept., 2014

Presentation of draft Y2015 to STB on 30th October, 2014

Presentation of draft Y2015 to EXCO on 3rd November, 2014

Presentation of Appropriation Bill to House of Assembly on 10th November,
2014
13
EXCO APPROVED MTBF Y2015-Y2017
Item
2015
EXCO
Approved
N’bn
Total Revenue
489.690
a. Internal Revenue
Proposed MTBF Projection (N’bn)
2015
2016
2017
489.690
514.175
539.884
566.874
327.206
337.971
348.855
365.991
386.661
b. Federal Transfers
139.300
139.300
142.535
151.139
154.370
c. Capital Receipts
23.184
12.419
22.785
22.754
25.843
Total Recurrent
Expenditure
234.665
235.415
240.415
249.401
252.515
a.Personnel Costs
87.921
90.671
90.671
90.041
91.090
b.Overhead Cost
146.744
144.744
149.744
159.360
161.425
Total Capital
Expenditure
Financing Component
255.025
254.275
273.760
290.483
314.359
-
-
-
-
-
Budget Size
489.690
489.690
514.175
539.884
566.874
Ministry of Economic Planning & Budget
2014
Revised
Budget
N’bn
14
MACRO-ECONOMIC ASSUMPTIONS
SN
Indicators/Years
2015
2014
GDP Growth
10%
8%
2
Inflation rate
7.0%
7.3%
3
Average Naira to USD Exchange rate
N160
N160
4
Forecast/Benchmark oil price
$78
$77.5
5
Oil Production
2.38mbpd
2.38mbpd
6
Unemployment (Lagos State)
8%
8%
Ministry of Economic Planning & Budget
1
Source: NBS; LBS; CBN; BUDGET OFFICE, ABUJA
Note: Current trends do not support some of these indicators and impact of such has been
taken into account in the Y2015 Budget Proposal
15
Y2015 BUDGET PRIORITY AREAS









Ministry of Economic Planning & Budget

Power
Agriculture
Transportation (Multi-modal)
Housing
Security
Education
Health
Water
Environment
e-Governance
16
Y2015 BUDGET
SN
Item
Y2015
Proposed
(Nbn)
TB
505.582
Approved
Y2015
MTBF
(Nbn)
489.690
Y2014
Revised
Budget
N’bn
489.690
B. Total Internally Generated Revenue
(IGR)
i . Internally Generated Revenue (IGR)
363.690
365.782
367.910
350.390
337.450
339.542
344.491
327.206
C. Capital Receipts
26.240
26.240
23.419
23.184
D. Federal Transfers
126.000
139.800
121.780
139.300
E. Total Recurrent Expenditure
i. Personnel Cost
239.948
113.170
242.100
113.170
235.415
90.671
234.665
87.921
ii.
F.
G.
H.
126.778
249.742
489.690
128.930
247.590
15.892
489.690
144.744
254.275
489.690
146.744
255.025
489.690
A. Total Revenue
Overhead Cost
Total Capital Expenditure
Financing Surplus
Budget Size
Ministry of Economic Planning & Budget
Y2015
Proposed
(Nbn)
Post-TB
489.690
17
Y2015 FUNCTION ALLOCATIONS
Details
Y2015
Proposed
(Nbn)
%
Post-TB
Y2015
Proposed
(Nbn)
%
Approved
MTBF
Y2015
(Nbn)
%
Revised
Y2014
Budget
(Nbn)
%
TB
107.690
22.0
99.270
20.27
97.938
20.0
102.750
20.98
ii. Public Order & Safety
15.547
3.2
17.898
3.65
19.588
4.0
21.995
4.49
iii. Economic Affairs
146.306
29.9
143.202
29.24
146.907
30.0
153.206
31.29
iv. Environmental
Protection
34.953
7.1
39.545
8.08
43.533
8.89
39.040
7.97
v. Housing & Community
Amenities
49.033
10.0
49.445
10.10
51.711
10.56
50.171
10.26
vi. Health
44.617
9.1
46.665
9.53
41.623
8.50
38.592
7.88
vii. Recreation, Culture &
Religion
3.118
0.6
3.447
0.70
3.182
0.65
3.485
0.71
viii. Education
82.114
16.8
83.639
17.08
78.350
16.0
77.281
15.78
ix. Social Protection
1.589
0.3
1.866
0.38
1.958
0.40
3.169
0.65
x. Planning Reserve
2.260
0.5
2.260
0.46
2.448
0.50
-
-
xi. Contingency
2.448
0.5
2.448
0.50
2.448
0.50
-
-
489.690
100
489.690
100
489.690
100
489.690
100
Total
Ministry of Economic Planning & Budget
i. General Public Service
18
Ministry of Economic Planning & Budget
KEY FUNCTION HIGHLIGHTS
General Public Service
 Resolution of critical Pension Arrears
 Training and Development with the Goal of enhancing
productivity Service-wide
 Delivering Efficient Public Service ICT Infrastructure/e-Governance
 Continuous Residents Registration and Issuance of Permanent
Resident’s cards
 Completion of Obas’ Palaces
 Public Financial Management System Reforms
19
KEY FUNCTION HIGHLIGHTS………………/2
Ministry of Economic Planning & Budget
Public Order and Safety
 Computerisation/Automation of Judicial procedures, including
e-filing
 Completion of on-going High/Magistrate Courts projects
 Continuous Upgrade of Court Rooms and Judges Chambers
 Witness Support Unit and Community Service Scheme
 Publication of Updated Laws of Lagos State by Law Reform
Commission
 Improving Safety and Disaster Management
 Continuous Capacity Building of LASTMA, KAI, Neighbourhood
Watchers and VIS Officials by the Law Enforcement Training
Institute(LETI)
20
KEY FUNCTION HIGHLIGHTS………………/3
Ministry of Economic Planning & Budget
Economic Affairs
 Implementation of Solar System for Secondary Schools and
Primary Healthcare Centres(Phase ll)
 Rehabilitation and Maintenance of existing Streetlight Facilities
 Provision of Traffic Signal Lights in strategic locations
 Advancement of Ten-Lane Lagos-Badagry Expressway / Blue Rail
Line Corridor
 Completion of Multi-Agency Office Complex
 Completion of other on-going Road Construction Projects and
Pedestrian Bridges
 Agric-YES, Accelerated Food Expansion Program: Rice, Animal
Husbandry, Root Crops
21
KEY FUNCTION HIGHLIGHTS………………/4
Ministry of Economic Planning & Budget
Environmental Protection
 Improvement/Maintenance of Drainage Channels
 Completion of New Sewage Treatment Plant at Odo IyaAlaro
 Implementation of on-going Water sub-sector Reforms
 Advancement of Adiyan Water works Phase II and
Improvement of water pipeline in Lagos West
 Solid waste management
 Continuous Mitigation of global warming through, Treeplanting, Greening and Beautification Programme
22
KEY FUNCTION HIGHLIGHTS………………/5
Ministry of Economic Planning & Budget
Housing & Community Amenities
 Lagos Home Ownership Mortgage Scheme (H.O.M.S)
 Implementation/Rehabilitation of small scale Rural
Water Schemes
 Provision of Rural Roads
 Completion of Isale-gangan re-development project
 Relocation of Okobaba Saw Mill
 Relocation of Ikeja Computer Village to Katangowa
 Electronic Certificate of Occupancy
 Continuous upgrading of slum areas
23
KEY FUNCTION HIGHLIGHTS………………/6
Ministry of Economic Planning & Budget
Health
 Improving Reliability and Responsiveness of Healthcare System
 Enhanced Service Delivery through the flagship Primary Healthcare
Centres
 Preventive Medical Screening including immunizations
 Continuous upgrading of Health facilities and Completion of on-going
Health Facilities, including the MCCs at Epe and Badagry
 Establishment of Oxygen Plant
 Refurbishment of Infection Disease Hospital (IDH), Yaba &
Construction of additional Facilities
 Medical Research Activities
 Upgrading of College of Medicine Laboratory
24
KEY FUNCTION HIGHLIGHTS………………/7
Ministry of Economic Planning & Budget
Recreation, Culture & Religion
 Completion/Maintenance of New and Existing Fire
Stations
 Purchase of Fire Fighting Equipment
 Maintenance/Development of Mini Stadia
Hosting, Organizing and Participation in
various Sports Competitions including
South West Games (D.A.W.N.)
 Pilgrims Welfare

25
KEY FUNCTION HIGHLIGHTS………………/8
Ministry of Economic Planning & Budget
Education
 Continued Rehabilitation/Upgrading of Public School
buildings/facilities
 Continued Provision of Free Textbooks and books for
Public School Libraries
 Improvement of Science and ICT facilities in Public
Schools, including e-libraries.
 Facility Management of Public Schools
 Provision of School Furniture
 Continuation of World Bank funded EKO Projects in
Secondary Schools
26
KEY FUNCTION HIGHLIGHTS………………/9
Ministry of Economic Planning & Budget
Social Protection
 Skill Acquisition Centres
 Economic Empowerment Programmes, including
microfinance support
 Advocacy programmes for Persons Living with Disability
 Continuous upgrading/Completion of Youth Centres
 Maintenance and upkeep of Old Peoples Home, Boys and
Girls Remand Homes
 Maintenance and Upkeep of Ketu Special Children’s Centre
 Upkeep and Maintenance of the Transit Home for victims of
Domestic Violence
27
Y2015 TOTAL REVENUE
SN
A.
Details
Y2015
Proposed
(Nbn)
Approved
MTBF
Y2015
(Nbn)
Revised
Y2014 Budget
(Nbn)
ii.
iii.
IGR (others)
Dedicated Revenue
34.945
19.551
49.164
15.574
37.676
19.970
iv.
Investment Income
0.700
0.500
0.500
v.
Extra Ord. Revenue
3.100
0.100
3.200
B.
C.
i.
ii.
Total Capital Receipts
489.690
489.690
489.690
363.690
367.910
350.390
279.153
279.153
265.860
26.240
23.419
Ministry of Economic Planning & Budget
i.
Total Revenue
Total Internally Generated
Revenue
LIRS
23.184
Grants (Donor)
7.096
6.174
4.300
Other Capital Receipts
19.144
17.245
18.884
28
Y2015 TOTAL REVENUE …./2
SN
Details
Y2015
Proposed
(Nbn)
Approved
MTBF
Y2015
(Nbn)
Revised
Y2014 Budget
(Nbn)
Federal Transfers
126.000
121.780
139.300
i.
Statutory Allocation
54.000
42.000
74.000
ii.
VAT
72.000
78.000
65.000
iii.
Extra Ord. Income
1.780
0.300
Total Revenue
489.690
489.690
Ministry of Economic Planning & Budget
D.
489.690
29
Y2015 RECURRENT EXPENDITURE
Details
Approved
MTBF
Y2015
(Nbn)
Revised
Y2014 Budget
(Nbn)
Total Recurrent
Expenditure
239.948
235.415
241.865
Total Personnel
Cost
113.170
90.671
88.221
Total Overhead Cost
126.778
144.744
153.644
Ministry of Economic Planning & Budget
Y2015
Proposed
(Nbn)
30
Y2015 PERSONNEL COST
Details
Total Personnel Costs
Approved
MTBF
Y2015
(Nbn)
Revised
Y2014
Budget
(Nbn)
113.170
90.671
88.221
72.911
71.432
i.
Personnel Costs (Basic & Allowances)
77.326
ii.
Personnel Costs (Consolidated)
2.462
2.596
2.659
iii. NYSC /Interns (Allowances)
0.300
0.347
0.320
iv.
Other Personnel Cost (Contingency)
1.400
1.774
1.729
v.
7.5% of Basic, Rent & Transport as Govt. Share to Pension
Contribution
3.762
3.700
3.500
vi. 2.5% Govt. Share to Pension Contribution
1.298
vii. 5% BSA (Pension Redemption Bond Fund)
3.866
viii. Pension Redemption Bond Fund Shortfall
ix.
Pension & Gratuities (Civil Service/ Teaching Services)
-
3.200
-
3.700
3.858
3.500
-
3.500
Ministry of Economic Planning & Budget
Y2015
Proposed
(Nbn)
3.200
31
Y2015 PERSONNEL COST
SN
Details
xiii. Pension & Gratuities (Judiciary)
xiv.
Retirement Planning/Contingency Expenses
(Pensions)
xv.
Pension Sinking Fund
xvi. Severance Pay (Pol. Off. Holders)
xvii. Subvention
0.976
0.074
0.341
0.234
0.200
1.200
Approved
MTBF
Y2015
(Nbn)
Revised
Y2014
Budget
(Nbn)
-
-
-
-
-
-
0.293
0.311
-
1.200
0.600
0.650
12.072
-
Ministry of Economic Planning & Budget
142% Pension & Gratuities
x.
(Civil Service/ Teaching Services)-Arrears
6% Pension & Gratuities
xi.
(Civil Service/ Teaching Services)-Arrears
15% Pension & Gratuities
xii.
(Civil Service/ Teaching Services)-Arrears
Y2015
Proposed
(Nbn)
0.370
1.200
32
Y2015 OVERHEAD COST
SN
Details
Approved
MTBF
Y2015
(Nbn)
Revised
Y2014
Budget
(Nbn)
126.778
144.744
153.644
i.
Overhead Costs
67.455
72.064
78.177
ii.
Dedicated Expenditure
19.551
15.574
19.970
iii.
Subvention
15.496
32.409
32.152
Ministry of Economic Planning & Budget
Total Overhead Costs
Y2015
Proposed
(Nbn)
33
Y2015 DEBT SERVICING
SN
Details
Y2015
Proposed
(Nbn)
Approved
MTBF
Y2015
(Nbn)
Revised
Y2014 Budget
(Nbn)
Debt Charges (External)
2.185
1.128
0.922
v.
Debt Charges (Internal)
22.080
23.589
22.423
vi.
Debt Charges
(Bond Administration)
-
-
-
249.742
254.275
247.825
SURPLUS ON CRF
Ministry of Economic Planning & Budget
iv.
34
Y2015 TOTAL CAPITAL EXPENDITURE
SN
Details
Approved
MTBF
Y2015
(Nbn)
Revised
Y2014 Budget
(Nbn)
249.742
206.793
254.275
214.181
247.825
215.346
ii.
Capital Development
19.144
17.245
17.884
iii.
Grants
7.096
6.174
5.300
iv.
Counterpart Funding
7.350
6.624
3.500
v.
Special Expenditure
4.500
5.000
5.500
vi.
Risk Retention Fund
0.100
0.105
0.100
vii.
Staff Housing Fund
0.050
0.050
0.050
viii.
Contingency Reserve
2.448
2.448
0.145
ix.
Planning Reserve
2.260
2.448
-
Ministry of Economic Planning & Budget
Total Capital Expenditure
i.
Core Capital
Y2015
Proposed
(Nbn)
35
Y2015 BUDGET FINANCING COMPONENTS
Details
Financing Surplus/Deficit
Financing
Y2015
Proposed
(Nbn)
Approved
MTBF
Y2015
(Nbn)
Revised
Y2014
Budget
(Nbn)
-
-
-
Financing Sources
External Loans:
90.818
90.818
99.746
ii.
iii.
B.
a. Development Policy Operations (DPO 3)
b. Others
Internal Loans
Bond Issue
Repayments
32.000
24.542
34.276
90.818
32.000
24.542
34.276
90.818
30.000
14.080
55.666
99.746
i.
External Loan (Principal Repayments)
1.689
1.689
0.768
ii.
Internal Loan (Principal Repayments)
Consolidated Debt Service
Accounts(CDSA)
27.384
27.384
34.985
61.745
61.745
63.993
iii.
Ministry of Economic Planning & Budget
A.
i.
36
KEY POINTS ON Y2015 BUDGET
SN Details
Y2015
Proposed
Y2015
MTBF
Total Personnel Cost/Total Rev
23%
19%
ii.
Total Personnel Cost/ IGR
31%
25%
iii.
Personnel Cost as % Recur. Exp
47%
39%
iv.
Capital : Recurrent Ratio
51:49
52:48
v.
Total Personnel Cost/Total Exp
23%
19%
vi.
Total Ordinary Revenue
N489.690bn
N489.690bn
vii.
Budget Size
N489.690bn
N489.690bn
viii. Financing Surplus
-
-
Ministry of Economic Planning & Budget
i.
37
NOTES ON Y2015 BUDGET
Ministry of Economic Planning & Budget
Honourable members of the Lagos State House of
Assembly are respectfully invited to consider as well
as note that:
i. Y2014 Budget Q3 Cumulative Performance of 86%
(Jan.- Sept)
ii. Y2015 Budget proposes a Total Revenue of
N489.690bn
iii. Capital Receipts of N26.240bn
iv. Y2015 Budget proposes a Total Recurrent
Expenditure of N239.948bn made up of :
a. Personnel Cost - N113.170bn
b. Overhead Cost - N126.778bn
38
NOTES ON Y2015 BUDGET
Ministry of Economic Planning & Budget
v. Total Capital Expenditure of N249.742bn
vi. Y2015 Budget has a nil financing
requirement
vii. a performance target of 100%
viii. All Core Programs developed for MDAs in Annexure XII,
ix. Additional Requests were received from Thirty Seven
(37) MDAs ,which amounted to N137,307,804,890 made up
of: a. Capital Exp. - N105,427,344,791
b. Recurrent Exp.- N31,880,460,189
x. Y2015 Budget with Budget Size of N489.690bn/Total
Revenue of N489.690bn
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 Eko
Ministry of Economic Planning & Budget
Thank you for listening
o ni Baje o.
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