N874.38BN DEBT: LAGOS STILL MAINTAINS POSTIVE CREDIT RATING, SAYS COMMISSIONER

IKEJA, Lagos, Nigeria -The Lagos state government says its positive credit rating remains high, despite its debt profile amounting to N874.38bn at the end of 2017. Giving an update on the state’s debt profile on Monday during the annal Ministerial Press Briefing holding at the Bagauda Kaltho Press Centre, Alausa, Ikeja, Commissioner for Finance, Akinyemi Ashade, said the government’s debt stock, comprising 48 per cent local debt and 52 per cent foreign debt currently stood at N874.38 billion at the end of 2017 while the debt service charge to total revenue ratio which stood at 17.61 per cent was still within the World Bank threshold of 30 per cent.

The Commissioner said the state government had continued to maintain a positive credit rating, however, adding that a downgrade of Nigeria’s sovereign rating would lead to a corresponding action on Lagos’ international drawing rights.

“As Nigeria continues to improve on its credit rating, we would be able to achieve better rating as we currently have, because no amount of revenue generation, no amount of employment growth of Lagos state can make us to surpass the sovereign rating,” he said.  

He, however, said the state government had taken some strategic steps to help Nigeria improve on its ratings; including adhering to fiscal discipline, improved revenue generation, reforms in infrastructure development, transport and embedded power. Giving an update on the revised Land Use Charge (LUC), Ashade said the state government has continued to engage critical stakeholders in line with its tradition of inclusive governance, adding that a wide range of response has been received.

He added that the state had so far achieved an average monthly Internally Generated Revenue (IGR), of N34billion in 2018 compared to monthly averages of the last three years. Ashade attributed the gradual improvement to the impact of the ongoing reforms and growth in the state’s economy.

He said, “Notably, we are recording gradual improvement in our average monthly IGR in 2018 compared to the levels achieved in previous years due to the impact of ongoing reforms and growth in the state’s economy. Based on our first quarter results, Lagos state has so far achieved an average monthly IGR of N34billion in 2018 compared to monthly averages of N22bn, N24bn and N30bn in 2015, 2016 and 2017 respectively.”

The Commissioner expressed optimism that the IGR would continue to rise even further as the state continues to implement the various reforms, driven by wider technology adoption and innovation, adding that the target to grow the state’s IGR to N50bn by next year was well on course.

“The target we set for ourselves is N50billion but we all know the kind of push backs we have experienced including people going to court and all that. Our commitment is not for now, its for the future of Lagos. We know it’s a marathon, we would win some and we would lose some, but we are very committed towards ensuring that we meet the target, but if we don’t meet it this year, definitely there would be another year, but we believe we would succeed in that target we set for ourselves,” Ashade said.

On Federal Transfers, he said since Lagos joined the league of oil producing states, the government had received a total of N327million revenue, comprising N197million and N130million received in 2017 and first quarter of 2018 respectively.

“Furthermore, we are in ongoing discussions with the Federal Government towards obtaining a refund for expenditure totalling N51billion that was incurred by the state government on behalf of the Federal Government for infrastructure projects developments in the state. We are optimistic of successful discussions that will result in the approval and payment of the amount owed to the state government by the Federal Government,” he said.