The Board of Executive Directors of the World Bank has approved $200m (about N39.4bn) credit to Lagos State to support a range of reforms relating to fiscal sustainability, budget planning, budget execution and the investment climate in the state.
A statement issued by the bank on Wednesday said the facility would help sustain the state’s recent economic growth and poverty reduction, while helping it to continue to deliver social services to the expanding population.
The credit from the International Development Association segment of the World Bank Group supports the Third Lagos State Development Policy Operation and is the last of a series of two development policy operations, which aim to improve public finances and the investment climate in a fiscally sustainable manner.
In the past decade, Lagos State achieved significant economic growth, improved its infrastructure and services, significantly reduced crime, and brought millions of people out of poverty, the bank said.
The World Bank Task Team Leader for the project, Jariya Hoffman, said with enhanced budget transparency and efficiency, adequate funding could be shifted to programmes to benefit the state’s booming population, especially the poorest families.
“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,” he said.
The 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.”
According to the bank, the operation will enhance the state government’s fiscal sustainability by anchoring the budget on a framework that accounts for key fiscal risks and improves revenue collection. Support for adopting a new approach to budget planning and preparation will ensure adequate allocation of budgetary resources to social services such as education and health.