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On Tuesday, November 25, 2025, the Executive Governor of Lagos State, His Excellency, Babajide Sanwo-Olu presented the State’s proposed budget for 2026 to the State House of Assembly. A budget he titled “Budget of Shared Prosperity.”
Why do State Governors present a Budget to the State House of Assembly?
It is a mandate by the Nigerian Constitution for the governor to tell the representatives in the State assembly how he or she intends to generate money to run the State and the projects he or she intends to carry out in the State. This is done for:
- • Transparency
- • Accountability
- • Representation
- • Checks and Balances
This constitutional process promotes good governance, fiscal discipline, and accountability.
So on Tuesday, November 25, 2025, the Executive Governor of Lagos State presented a proposed budget of N4.237trillion against the 2025 budget of N3.367 trillion, which represents a 25.85% increase.
He highlighted the budget to state that
Capital Expenditure, which includes
• Construction and Rehabilitation: Roads, bridges, and public facilities
• Asset Acquisition: Vehicles, equipment, and machinery
• Project Funding: Infrastructure development, e.g., rail, jetties
• Housing Development: Construction of affordable housing units will be N2.185 trillion, which is a 5.5% increase from this year’s budget.
• Recurrent Expenditure, which includes
• Personnel Costs covering salaries and allowances for government employees
• Overhead Costs covering operational expenses, maintenance, and other running costs
• Debt Charges: servicing debts and loans is put at N2.052 trillion, which is a 58.38% increase from the current budget
• Deficit Financing, which literally means the practice of borrowing to finance the excess of government expenditures over revenues.
This approach allows the state to:
• Bridge funding gaps: Cover shortfalls in revenue
• Invest in development: Fund infrastructure and social projects
• Stimulate growth: Boosting economic activity will cost N243.332 billion, which is 38.96% against the deficit financing budget of 2025, which was ₦408.902 billion.
However, with all the proposed expenditures above, how is the State government going to generate money to fund this budget?
The projected revenue is N3.993 trillion to be generated from the following;
• Taxes: Pay-As-You-Earn (PAYE), Value Added Tax (VAT), and other tax revenues
• Ministries, Departments, and Agencies (MDAs): Revenue generated by government agencies, such as licenses, permits, and fees
• Informal Sector: Revenue from informal businesses, markets, and traders
• Tourism: Revenue from tourist attractions, hotels, and related services
• Real Estate: Revenue from property taxes, land sales, and leases
• Transportation: Revenue from transportation services, such as bus terminals and tolls
• Trade: Revenue from commercial activities, such as market fees and licenses
In an interview with a financial expert, Elijah Osianor, PhD, FCA, FCTI, he commended the State government for the budget, especially the reduction of deficit financing from N408.902 billion in 2025 to N243.332 billion, which implies that the internally generated revenue is on the increase, which speaks about good governance.
“What the Deficit Means for Lagos State• Manageable Gap: A deficit of about 6% of the total budget is relatively moderate for a growing economy like Lagos, especially with high IGR.• Financing Options: The state may fund this gap through borrowing, public-private partnerships, or drawing on reserves.• Sustainability Signal: A declining deficit indicates improving fiscal health if revenue projections are achieved,” Dr. Osianor explained
Security; Despite the geographical location of the State, the Executive Governor didn’t take security and safety of his residents for granted. He allocated a whooping sum of N147.040 billion under Public Order and Safety. This allocation reflects the State’s priority on security and emergency readiness with a focus on strengthening coordination and investments, because no investor will like to invest in a State without adequate protection of life and property.
According to sources, with the N3.367 trillion budget of 2025, the State government, after meeting the statutory and constitutional obligations to the State it was still able to;
Complete 13 new jetties, upgrade works on existing jetties, and progress on the 68km Green Line rail from Marina to Lekki Free Trade Zone.
• Constructed Samuel Ekundayo/Toga Road in Badagry, Abaranje Road in Alimosho, and Adamo-Akanun-Agunfoye Lugbusi Roads in Ikorodu.
– Completed 444 housing units at Sangotedo Phase II, 420 units in Badagry, and 136 units at Ibeshe Phase II.
• Rehabilitated the Lekki-Epe Expressway Phase and construction of the Opebi Link Bridge to Maryland.
Therefore, there is no doubt that the 2026 budget, if implemented, will improve the lives of Lagosians.
