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Governor Babajide Sanwo-Olu has been commended for his innovative governance and commitment to infrastructure development, despite the prevailing economic challenges in the country.
Analysing “LASG’s Development Agenda Under Governor Babajide Sanwo-Olu” on Business Nigeria, a Television Continental (TVC) programme, an economic expert and Chief Executive Officer, Economic Associates, Dr. Ayo Teriba, said Sanwo-Olu had been able to manage some economic challenges that affect governments across the globe.
His words: “It is surprising to note that in spite of the nation’s economy slipping into recession, the Sanwo-Olu administration has had to manage some economic turbulence and has been able to keep the tempo of interventions in the capital space, human capital space and the sectoral space, manifesting in projects, such as construction of bridges, roads, hospitals, etc, despite the shortfall in revenue and receipts from the Federation Account”.
Speaking on revenue generation strategies and what the State can do to meet up its revenue needs, Dr. Teriba said the States should mind revenue performance as it relates to declining tax and learn to be independent of oil and tax revenue.
There is a need to expect less from taxes as an economic downturn automatically leads to decrease in the amount of tax paid, he said.
“Lagos can explore non-tax revenue accrued from the stimulation of asset value of the city-centre, such as infrastructure development through rail, which is a gold mine in advanced nations. Seek more non-tax revenue,” Teriba said.
On taking of loans, the economic expert asserted that no State or country could abstain from borrowing.
Teriba said: “The issue is not in the debt but how we borrow. Before, it used to be through promissory notes, but now it is through assets, which should be positioned to yield revenue and generate the capital raised to provide them. It is about securitised debt; debt backed by asset”.
Laying emphasis on the administration’s commitment to infrastructure and other indices of development, Dr. Teriba itemised four pillars that should guide project financing through sustainable budgeting funded using tax and non-tax revenues.
“The State needs to develop its infrastructure to tap into the potential of its human assets, develop the value chains in its resources, such as coconut and other assets that define Lagos. The more optimised they are, the better for the State,” he said.
According to him, Public-Private Partnership (PPP) is an idea to prove that Government cannot do it alone and requires the support of the private sector.
Dr. Teriba said: “Lagos already tops the Foreign Direct Investment (FDI) figures released by the National Bureau of Statistics (NBS) as the State has benefited from FDI in private and public assets but the State needs to do more to attract FDI into public assets, pursue stronger ties with the private sector and convert physical assets to self-funding projects.
“I don’t think we should demonise debt, if it is contracted correctly, especially to build assets. Lagos should also be thinking of infrastructure financing not only in terms of bonds but also in outright equity financing.”
He spoke further that each State is sitting on valuable public assets which they can convert to equity and develop with foreign investors finance.
“The era of looking towards the Federation Account for revenue has ended. In the past, we will need revenue to maintain physical and human capital, but now, value chains are capable of paying for that because they are assets we can unlock to finance themselves,” Teriba said.
