Benjamin Omoike
LAGOS, Nigeria – The Lagos State Government says it is set to go to the capital market to float a bond of N60 billion this month for infrastructural development.
The N60 billion bond is the first tranche of the N500 billion bond series the Lagos State House of Assembly approved for the Governor Akinwunmi Ambode administration few months ago in which the government will be drawing from the bond in tranches.
Commissioner for Finance, Akinyemi Ashade disclosed this at the weekend at the Annual General Meeting, AGM, of Bond series and rating programme held at the Civic Centre, Victoria Island, Lagos, Southwest Nigeria.
Ashade said government needed deficit financing for the purpose of undergoing massive infrastructural development across the state, adding that the strength of the state government’s Internally Generated Revenue, IGR qualified it for deficit financing, as means of paying back easily were on ground.
The commissioner disclosed that the state government was drawing N60 billion bond from the N500 billion bond approved by the Assembly for the state recently and that the bond would be floated this month and any moment from now.
He said by next year, the government would draw another N100 billion bond from the N500 billion bond approved by the Assembly for the state throughout the period of the current administration.
Ashade disclosed that the Security Excahnge Commission, SEC, was already in the state to assess the projects the bond would cater for, saying that the commission would be able to give the state the nod to go ahead anytime from now as it had inspected the projects.
However, on the AGM, which was on the three previous bonds entered in by the state government, the commissioner said the bonds were used in executing worthwile projects across the state.
The bonds are: N57.5 billion fixed rated programme 1, Series 2 bond of 2010 with a maturity date of 2017; N80 billion fixed rated programme 2, Series 1 bond of 2012 which will mature in 2019 and N87.5 billion fixed rated programme 2, Series 2 bond of 2013 with a maturity period of 2020.
Ashade said Lagos, being the most populous city in Sub-Saharan Africa and the 5th largest economy in Africa due to its Gross Domestic Product, GDP size, was often faced with infrastructural challenges.
He said in view of this, there was the need for the state to continuously strive to increase its revenue base to meet the needs and aspirations of its citizens, adding that this informed the decision of the state to borrow through the bonds, taking into cognizance its strong IGR base and its superb debt management structure.
“The bond series which the state government started in 2008 has had tremendous impact on the socio-economic development in the state and positively affected the life of the people. The state government has continued to manage and recently restructured two of its outstanding bonds, making for better management of its debt profile,” he said.
Some of the projects executed through the bonds are the rehabilitation of Alimosho General Hospital, Ibeju Lekki General Hospital, Funsho Williams Avenue, construction of Ago Palace Way, reconstruction of Lagos-Ibadan Expressway, among others.
