Lagos State, yesterday, secured $200 million World Bank credit to support a range of reforms on fiscal sustainability, budget planning, budget execution, and the investment climate in the state.
The credit is expected to help sustain the state’s recent economic growth and poverty reduction index, while continuing to deliver social services to the city’s expanding population.
A statement by Senior Communications Specialist, World Bank, Nigeria, Obadiah Tohomdet, said the fund from the International Development Association, IDA, which supports the Third Lagos State Development Policy Operation, is the last of a series of two development policy operations to improve public finances and the investment climate in a fiscally sustainable manner.
Lagos State government was said to have, in the past decade, achieved significant economic growth, improved its infrastructure and services, significantly reduced crime, and brought millions of people out of poverty.
World Bank Task Team Leader for the Project, Jariya Hoffman, said: “The operation is focused 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.
“With enhanced budget transparency and efficiency, adequate funding can be shifted to programmes to benefit the state’s booming population, especially the poorest families.”
According to him, the operation will enhance the state government’s fiscal sustainability by anchoring the budget in a framework that accounts for key fiscal risks and improves revenue collection.
Also, he explained that the project would support adopting a new approach to budget planning and preparation and ensure adequate allocation of budgetary resources to social services such as education and health.
In addition to budgetary improvements, the project is equally expected to support a reduction in the cost of land transactions and development and introduction of an electronic web-based system for processing of planning permits that will help to improve the business climate and attract new investments.
Also commenting on the credit, World Bank Country Director for Nigeria, Marie Francoise Marie-Nelly, said: “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.
“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.”
The World Bank’s IDA was established in 1960 to help the world’s poorest countries by providing grants and low to zero-interest loans for projects and programmes that boost economic growth, reduce poverty and improve poor people’s lives.
IDA is one of the largest sources of assistance for the world’s 77 poorest countries, 39 of which are in Africa.
Resources from IDA bring positive change for 2.8 billion people, the majority of whom live on less than $2 a day.
Since 1960, IDA has supported development work in 112 countries. Annual commitments have averaged about $18 billion over the last three years, with about 50 percent going to Africa.