At least 5.9 billion Naira has been saved following the implementation of the Treasury Single Account (TSA) in Lagos State in the last nine months.
Commissioner for Finance, Mr Mustapha Akinkunmi disclosed this at the 2016 Ministerial briefing, as he affirmed that the Treasury Single Account had come to stay in the State.
Mr Akinkunmi stressed that this was also made possible through increased Internally Generated Revenue (IGR) and prudent spending of the State government.
He explained further that the State IGR accrued to 76 billion Naira while it received only seven billion Naira from the Nigerian government.
The Commissioner maintained that despite dwindling oil revenues, Lagos economy remained stable as he appealed to citizens for greater cooperation.
In Q1 this year (2016), average contribution of IGR to total revenue was 75 percent, showing the increasing importance of IGR to the State’s financing, in the wake of reducing federal transfers. Total IGR for the first quarter amounted to N76 billion, whilst federal transfers amounted to N26 billion, of which only N7 billion was received from Statutory Allocation.
Shoring up revenue
Mr Akinkunmi revealed that every revenue generating agency of government had been given a mandate to shore up its revenue generation capacity so as to respond to the trend of dwindling revenue from the Nigerian government.
“In response to this trend, all major revenue generating agencies have been further tasked to increase revenue targets by 10 percent for the year. Furthermore, Lagos has a taxable population of at least 8 million, signalling growth prospects for tax collection, frantic efforts have been set in motion to grow IGR by 50 percent in 2017/18 by the GIS Land Administration Project and the Smart City Project,” he said.
Loan re-engineering
According to him, the present administration has successfully re-engineered the State’s outstanding internal loans to reduce burden on IGR and technically saved N3.8 billion per month, saying it has been applied continually for capital projects.
In his words, this was achieved by re-negotiating interest rates from an average of 18 percent monthly (N5.35 billion monthly payment) to 12.5 percent (N1.52 billion monthly payment). The State restructured its outstanding bonds from bullet payment to amortising payment to reduce debt service resulting in huge savings recorded from this initiative.”
The commissioner added that through the debt restructuring, the State had also achieved savings of over N500 million in monthly contributions to Consolidated Debt Service Account (CDSA) as well as over N40 billion savings in interest payments over the lifetime of the instruments.
He maintained that the state won virtually unanimous approval for the restructuring at the Bondholders’ Extraordinary General Meeting, showing the continued strong relationship between Lagos State and the capital market, such feat affirms continued confidence in the strength of Lagos State’s creditworthiness.
“In fact, the International Credit Rating Agency, Fitch Ratings, released a report in March 2016 – to quote the report, Fitch’s affirmation reflects its expectations of strong operating performance in the medium term, outstanding sophistication and transparency management compared to local standards, as well as satisfactory debt metrics,” he reiterated.
Prompt salary payment
In spite of competing sectors for the limited funds, he said the Lagos State Governor, Akinwunmi Ambode led government has ensured prompt payment of all employees’ salaries on or before 23rd day of every month with the payment of September, 2015 salary on the 17th of the month before the Sallah break and also the payment of March salary on the 22nd before the Easter holiday.
“The state government facilitated the opening of the N6.25billion Lagos State Employment Trust Fund Account which will allow youths and unemployed citizens have access to adequate finance for entrepreneurial ventures,” he said.
Informal sector compliance
On his part, the Chairman, Lagos State Inland Revenue Service, (LIRS), Mr Olufolarin Ogunsanwo appreciated artisans, market men and women as well as domestic staff for complying with the payment of domestic tax since its commencement a few months ago.
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