The Lagos state government has been granted a $200 million credit by the World Bank Board of Executive Directors on Wednesday to support a range of reforms pertaining to fiscal sustainability, budget planning, budget execution, and improvement of the investment climate.
The World Bank, in a statement in Abuja, said that the facility would help sustain the state’s recent economic growth and poverty reduction, while continuing to deliver social services to the city’s expanding population.
The credit from the International Development Association, the Bank explained, would support the Third Lagos State Development Policy Operation, the last of a series of two development policy operations aimed at improving public finances and the investment climate in a fiscally sustainable manner.
In the past decade, the World Bank noted that Lagos State had achieved significant economic growth, improved its infrastructure and services, significantly reduced crime, and brought millions of people out of poverty.
“The operation’s focus on furthering improvements in the transparency of the budget system, effectiveness of public expenditures, and the business climate will help sustain the pace of economic growth and thus the state’s positive momentum towards income equality and the delivery of public services,” World Bank Task Team Leader for the project, Jariya Hoffman, said.
“With enhanced budget transparency and efficiency, adequate funding can be shifted to programmes to benefit the state’s booming population, especially the poorest families”, the official added.
The operation, the World Bank said, would enhance the state government’s fiscal sustainability by anchoring the budget in a framework that accounts for key fiscal risks and improves revenue collection.
Besides, it said support for adopting a new approach to budget planning and preparation would ensure adequate allocation of budgetary resources to social services such as education and health. Again, support for reforms of budget execution, including increased operationalization of the Oracle-based Financial Management System as well as reform of public procurement, it said, would create greater transparency and efficiency in the use of budget resources.
In addition to budgetary improvements, the Bank said the project’s support for a reduction in the cost of land transactions as well as the development and introduction of an electronic web-based system for processing of planning permits would help to improve the business climate and attract new investments.
“This operation is designed to assist Lagos State in its quest to continue its recent success in spite of the challenges brought on by rapid economic and population growth” World Bank Country Director for Nigeria, Marie Francoise Marie-Nelly, said.
“As an urban agglomeration that has reduced income inequality during double digit economic growth, Lagos is an example of inclusive growth in Nigeria. If the Lagos experience is sustained, there is strong potential for this type of inclusive growth to spread to other parts of Nigeria.”