By Edith Igbokwe, Damilola Kushimo and Olushola Okewole
Unexpected expenses incurred during the efforts to manage COVID-19 despite shutdown of revenue collection are forcing local government councils in Oshodi-Isolo to go back to the drawing boards and review their budgets.
Since the lockdown 11 weeks ago, council workers have stayed at home and direct revenue collection by council officials has ceased.
Yet, the councils have met their obligations to workers by paying salaries promptly, funding other recurrent expenditures and even embarking on contractual capital projects.
The most challenging cost has been the provision of palliatives to the vulnerable due to the biting effects of COVID-19 and the enforcement of the lockdown by security agents.
The Lagos State government led the way by announcing that the State Executive Council has approved the reduction of the budget by 21 percent.
Economic Planning and Budget Commissioner Mr. Sam Egube on May 20 said the N1,168.6billion budget would be pruned to N920.5billion.
This includes 28 per cent reduction in Total Capital Expenditure from N711.033billion to N508.861billion and 24 per cent from N1,107.029billion to N812.46billion.
Reasons for the cut according to Egube include slide in crude oil price and internally generated revenue.
Others are rising inflation, low investment, low demand and fall in manufacturing output.
While the Lagos House of Assembly is expected to consider the proposal for approval, a similar process has started in the local governments for the same reasons.
Based on the current economic situation, the executive arm of each local council has recalled the year 2020 budget presented to the legislative arms for an adjustment due to align with the current situation and have achievable budgets.
Initially, Oshodi-Isolo LG had proposed a N2,222,461,955.37 budget for the 2020 fiscal year which was presented to the legislative arm for ratification.
In the budget, the sum of N25million was allocated to the Health sector to take care of the Lagos State Health Insurance scheme, rehabilitation of health clinics and provision of health equipment while the sum of N1million was budgeted for HIV/ AIDS in overhead.
ECHONEWS gathered that apart from the federal allocation, the local government was targeting IGR to about 30 per cent for the execution of the budget.
Presently, the budget has been sent back to the budget office for review to meet up with the reality of the economy.
According to the majority leader, Hon. Seyi Jaiyesimi, the legislative arm had earlier considered the budget, done the necessary things concerning the progress of the budget but yet to be presented to the executive to be signed into law before it was retrieved to be adjusted in regards to the ongoing COVID -19 crisis.
Meanwhile, similar situation occurred in Isolo and Ejigbo LCDAs as their own budgets have also been retrieved by the executive arm for necessary adjustment.
The Secretary to the Local Government (SLG), Ejigbo LCDA, Hon. Dr. Paul Fregene told ECHONEWS that the local government has commenced the review of the budget having realized that the earlier promulgated one could not be realised considering the present economic situation.
‘It is sure, every family, institution both private and government are reviewing their initial budget projection. Revenue from the federal allocation too has dropped so budget review is inevitable. The chairman, Council Manager and Head of Department of Budget are on it,” he said.