Doherty queries Lagos debt burden, feasibility of 2025 budget

The African Democratic Congress (ADC) governorship candidate in the last general election, Funso Doherty, has expressed concern over the recently passed 2025 Lagos budget amid the state’s rising debt.

In an open letter to Governor Babajide Sanwo-Olu, Doherty pointed out several areas of concern, including the “unrealistic” budget size, the state’s rising debt, uncertainty surrounding the state’s financial position, and the need for greater transparency in the budget process.

The approved budget of N3.37 trillion represents a 49 per cent increase over the 2024 budget of approximately N2.26 trillion, and incorporates deficit financing of roughly N400 billion.

He questioned the feasibility of the budget, citing a pattern of the state’s actual receipts and expenditures falling short of approved estimates in previous years.

The politician e noted that as at September 2024, with only three months left to the end of the year, interim figures showed that the state’s actual receipts and expenditures were a far cry from the approved 2024 budget of N2.26 trillion, despite the “elevated” Federation Account Allocation Committee (FAAC) allocations during the year.

Moreover, Doherty expressed concern over the state’s rising debt, which has increased sharply from approximately N1.4 trillion to N2.69 trillion between January 2023 and June 2024.

According to him, the majority of the state’s debts are denominated in foreign currency, exposing the state and its citizens to significant currency risk, stating the development was ill-advised in an economy like Nigeria’s with its history of recurrent volatility in the value of the Naira.

He added that the recent judgment by the Supreme Court on the financial autonomy of local governments had also introduced uncertainty surrounding the state’s financial position.

Doherty stressed that the state government’s revenues, including its internally generated revenue (IGR) and share of FAAC revenues, would be crucial in supporting spending and debt servicing.

The Lagosian also called for greater transparency in the budget process, noting that the total breakdown of the 2025 budget was not publicly available. He underscored the need for increased investment in technical education, provision of potable water, and effective mass transit options. He said: “There should be greater transparency around the budget process.

“The detailed breakdown of the 2025 budget is not in the public domain. You may recall that I had in the past questioned the inclusion in the 2023 budget breakdown (when it was available long after passage of the budget) of a line item under the general expense category for “Special Duties Expenses” in the colossal amount of N212 billion.

“Alarmingly, this recurred in 2024 and was a low priority by the state in the allocation of expenditure. Technical education also needs substantially more focus and investment. We can point to similar shortcomings in terms of effectiveness and actual outcomes achieved in other basic, yet development-critical areas.”