Nigeria’s wealthiest state, Lagos, has said that most of its ongoing projects are funded with monies raised through bonds and loans.
The State Commissioner for Finance, Rabiu Olowo, made this known during the 2021 Ministerial Press Briefing held in the State.
The state according to the National Bureau of Statistics received N115.93bn in the full year 2020.
Lagos also raised the largest Internally Generated Revenue of N418.99bn, leading other states including the Federal Capital Territory.
The Lagos Finance Commissioner said, “We talk about debt management, like I used to say, debt is good. The most important thing is how you manage debt. In the last two years, we have raised the largest bond ever by any subnational in this country, the N100bn bond and that is why when other states are taking a break, we are not taking a break.
“That is why you see road projects going on, you see intervention in agriculture, you see intervention in education, You see intervention in energy.”
Lagos accounts for 12.15 per cent of the N4.19trn debt stock of states and the FCT.
Olowo said the state achieved a debt servicing obligation of N8.5bn in terms of saving.
He disclosed that the state renegotiated interest rates charged by the banks for state loans from 20 per cent to 14 per cent in the first instance.
“After that, that wasn’t enough for us, we renegotiated again and we brought it down to 12 per cent,” he said.
The N6.91bn bond at the rate of 15.60 per cent interest all issued under the N500bn Bond Issuance Series Programme will be fully paid by the end of June 2021.
He said the state is planning to issue a fresh bond of at most 10 per cent interest rate.
Olowo revealed that executing the decision would save the state about N20bn.