₦300 Million Collected in First Four Months
CEM REPORT, FINANCE| Lagos State is showing positive signs of meeting its Land Use Charge (LUC) target for 2024. According to Ope George, the Lagos State Commissioner for Economic Planning and Budget, the state has collected ₦300 million in LUC revenue within the first four months of the year. This figure represents a significant portion of the ₦700 million budgeted for LUC in 2024, suggesting the state is well on track to achieve its target.
The news comes as a welcome development for the Lagos State government, which has historically relied heavily on internally generated revenue (IGR) sources like LUC to finance its operations.
Notably, this news comes amidst discussions about the adequacy of the 2024 Lagos State budget. Last year, Governor Babajide Sanwo-Olu proposed a ₦2.2 trillion budget, a substantial 69% increase from the previous year’s ₦1.3 trillion. This ambitious budget dubbed the “budget of renewal,” aimed to address critical infrastructural needs within the state.
However, Commissioner George acknowledged the potential shortcomings of the ₦2.2 trillion budget. He revealed that during consultations with government agencies, the financial needs identified exceeded ₦4 trillion. This significant gap highlights the immense infrastructural challenges Lagos faces.
“While Lagos could potentially function with a N4 trillion budget, current realities dictate a more conservative approach,” explained Mr. George. “We need to identify and secure additional revenue sources to comfortably fund a budget of that size.”
Despite the budgetary limitations, the collected LUC revenue provides a glimmer of hope. The ₦2.267 trillion allocated for 2024 prioritizes the completion of ongoing crucial infrastructure projects. These projects include the much-anticipated Blue and Red Line Rail Systems, new stadia constructions, the Lekki-Epe Expressway expansion, the New Massey Children’s Hospital, and the Opebi-Mende Link Bridge.
“The revenue generated so far is an indication that the N700 million projection from Land Use Charge in the 2024 Lagos state annual budget is achievable,” Commissioner George stated.
 Land Use Charge in Lagos
The Land Use Charge system, introduced through the Lagos State Land Use Charge Law of 2020, plays a vital role in generating internal revenue for the state government. This law mandates property owners, occupants with long-term leases (over ten years), or those receiving income from the property (on their own behalf or as a trustee) to pay LUC.
The implementation of LUC in 2020 followed amendments made to the original Land Use Charge Law of 2018 by the Lagos State House of Assembly. These amendments aimed to streamline the LUC system and ensure a fairer distribution of the financial burden associated with infrastructural development in the state.
Challenges
While the initial LUC collection figures are encouraging, significant challenges remain. The ₦300 million collected represents only 42.8% of the targeted ₦700 million for the first four months. Ensuring consistent collection throughout the year will be crucial for achieving the annual target.
Furthermore, the substantial gap between the budgeted amount and the actual infrastructural needs necessitates exploring additional revenue streams. Diversifying the state’s income sources will be paramount in ensuring Lagos has the resources necessary to complete its ambitious development plans.
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If You Ask Me
The Lagos State government’s commitment to infrastructural development is commendable. The collected LUC revenue, coupled with the identification of new revenue sources, offers a path towards achieving this goal. However, continued efforts to improve LUC collection efficiency and explore alternative funding options will be critical for Lagos to bridge the infrastructural development gap and solidify its position as a thriving economic hub in Nigeria.
