Lagos State Presents N3tn Budget for 2025 Fiscal Year

Lagos State Governor Babajide Sanwo-Olu has presented an unprecedented budget of N3 trillion for the 2025 fiscal year, underlining the state’s unchallenged position as the economic hub of Nigeria.

This financial plan, aptly titled The Budget of Sustainability, was unveiled to the Lagos State House of Assembly on Thursday. The proposal underscores Lagos’ role as the lifeline of Nigeria’s economy, with no other state in the federation having crossed the N2 trillion budget threshold.

The scale of this budget reflects Lagos’ unique capacity to mobilize resources, driven by its dynamic economy and expansive tax base.

The N3 trillion budget is structured with a projected total revenue of N2.6 trillion and a financing deficit of N408 billion. Governor Sanwo-Olu outlined that N1.77 trillion is earmarked for capital expenditure, while N1.24 trillion is designated for recurrent expenses, including personnel costs, overheads, and debt servicing. Capital-intensive projects such as road infrastructure, environmental initiatives, healthcare, and education dominate the financial blueprint, with economic affairs receiving the highest allocation of N908.7 billion.

The scale of this budget points to Lagos’ ambition to sustain its infrastructure development and improve the lives of its over 20 million residents. Sanwo-Olu emphasized the durability and adaptability of these investments, aiming to cater to the state’s rapidly growing population and urban demands.

However, the budget’s enormity has raised concerns about potential inefficiencies and the inclusion of phantom projects and inflated expenditures. Many have expressed skepticism about the transparency and accountability of such a massive financial plan, warning of the risks associated with unchecked allocations. Claims of padded expenditures have further fueled doubts, with some stakeholders calling for greater scrutiny to ensure the budget serves its intended purposes.

This concern stems from a review of past budgets. For example, Funso Doherty, a Lagos-based chartered accountant and politician, recently spotlighted several significant allocations in the Lagos State Government’s 2023 budget.

Among the highlighted expenditures were N440 million allocated for new Lexus LX 600 bulletproof SUVs for the Chief of Staff’s office and N7.48 million for liquid fragrance replacement in the Governor’s office. Additionally, the budget earmarked N400 million for ad-hoc charter plane expenses.

Doherty also expressed concern over a N69.9 billion allocation for the repair and upgrade of a section of the Eti Osa/Lekki Expressway, questioning the scale of the investment in the road rehabilitation project.

Further scrutiny was directed at the Lagos Rail Mass Transit (LRMT) project, particularly the N218 billion allocation for phase 2 construction. Doherty called on the government to ensure transparency and guard against potential cost overruns or inefficiencies in the project.

This development follows a steady increase in Lagos’ budget over the years. The state’s financial plan grew from N1.77 trillion in 2023 to N2.27 trillion in 2024, culminating in this record-breaking proposal for 2025. The consistent expansion of Lagos’ budget underscores its economic strength, buoyed by robust internally generated revenue (IGR) and a diverse economic base.

Despite its promise, economists have highlighted the challenges of the proposed budget. They note that Lagos must sustain its impressive revenue-generation capacity while ensuring that expenditures translate into tangible benefits for residents. In addition, the rising debt servicing costs pegged at N125 billion in 2025, and the need to curb leakages and corruption were cited as critical issues that need to be addressed.

Assembly Speaker Mudashiru Obasa assured the governor of the legislature’s commitment to a thorough review of the budget, signaling the need for checks and balances as the state pursues its ambitious agenda.