[wysija_form id=”1″]March 17, 2015 – Lagos State Governor, Babatunde Fashola today said that Nigeria’s economy is now in troubled waters. He said the Federal Government has failed to address the dwindling foreign reserves and decline in exchange rate.
Fashola who was addressing members of the Lagos State House of Assembly said the reality of poor power supply has been on for a very long time.
“The Nigerian economy is caught in troubled waters without constant electric power supply”, he said adding that 30 percent of the capital expenditure and 70 percent recurrent expenditure at the federal level portends bleak economy.
The governor who also spoke on the economy of Lagos State said the 2015 budget would be based on the revenue accruable to the treasury of the state government in line with economic reality.
He explained that the purpose of the address was to propose an amendment on the appropriation of MDAs which had been based on 100 percent budget performance but now to be reviewed on actual revenue performance to have equity in the MDAs.
“Constant depletion of the country’s external reserves and badly managed exchanged rate have had negative impacts on the economy.
“Regrettably the actions of our economic managers at our best is uncoordinated and inconsistent further exacerbating the nation economic problems.
“Our external reserves have depleted from $37bn in November 2014 to about $20.6bn. Currently the exchange rate depleted from N155 in November 2014 to a dollar to about $198.3.” This according to the governor represents 28 percent devaluation.
“The exchange rate at the parallel market currently hovers around N228 to the US dollar, a decline about 26 percent. The consequence of all these is that the purchasing power of the citizens has been badly eroded.
“Consequences of the dwindling oil price are highly elaborated on the significant reduction in the revenue of the federation account inclusive of bad receipt. Decline from N622bn to the monthly average of N541bn, a decrease of 13 percent,” he said.
“The Lagos revenue share has declined from a monthly average of N11.05bn in 2014 to the current average of N10.34bn. The state records a decline of 14 percent.
“In 2014, gross revenue performance was 86 percent, our revenue performance on the first line charge has never achieved a 100 percent,” he said.