The state Commissioner for Economic Planning and Budget, Sam Egube, made this known at a press briefing on Thursday in Lagos.
Mr Egube said this was to help mitigate the economic and social headwind precipitated by the novel Coronavirus (COVID-19) pandemic in the state.
He said the budget would be reduced to N920.5 billion against N1,168.6 trillion, hitherto approved by the State House of Assembly.
The News Agency of Nigeria (NAN) recalls that the Lagos Assembly passed N1.169 trillion as the 2020 Appropriation Bill for the state.
The approved budget contained N457 billion recurrent expenditure and capital of N711 billion, showing a strong preference for capital projects by 60 per cent.
The commissioner listed some of the factors that necessitated the review of the 2020 Budget to include: fall in crude oil prices with deleterious effects on statutory allocation expectations, downward pressure of IGR and devaluation of the Naira.
He added that reduced public and private investment, increased inflation, decline in demand for goods and services and reduction in manufacturing activities portended increased unemployment and lower GDP growth.
Mr Egube said that part of the state’s holistic approach to COVID-19 shock already adopted by the state government included, maintaining a strong pandemic response, restarting the state economy and re-imagining the way of the state’s operations.
He explained that with the strong pandemic response, the state government would engender food security and safety net, provide economic stimulus, and ensure society was run by assuring public safety and wellbeing.
“To restart the economy, we are going to optimise the state’s budget for investments in jobs and priority sectors through job creation, economic stabilisation and fiscal consolidation.
“While to re-imagine the state economy, we will prepare the state to operate and thrive within the new reality with digitisation, business environment reforms and economic diversification,” the commissioner added.
He gave the breakdown of the budget as follows: the total budget size is reduced by 21 per cent from N1,168.6 trillion to N920.5 billion with the financing deficit increasing slightly by 11 per cent from N97.5 billion to N108.1 billion.
Recurrent expenditure (Debt and Non-Debt) declined by 10 per cent from the initial N457.5 billion to N411.61 billion and total capital expenditure reduced by 28 per cent from N711.033 billion to N508.9 billion.
The revised total revenue, according to Mr Egube, represented a drop of 24 per cent from the projected N1,107.03 billion to N812.5 billion.