BEVERLY HILLS, November 18, (THEWILL) – Lagos State government says it will return to the Nigerian bond market to seek funding to complete ongoing capital projects and undertake new ones.
This is as the Governor Akinwunmi Ambode-led government pushes to fulfil its electioneering promises to the people.
Mustapha Akinkunmi, the state commissioner for finance, who disclosed this on Tuesday, did not, however, give details about how much the government would be seeking to borrow, but said “we are surely going to the market next year to continue to finance infrastructural projects.”
The state is currently retiring its fixed rate bond issuance series, which saw it borrow a total of N275 billion between 2009 and 2014. It had issued the bond in series of N50 billion, N57.5 billion, N80 billion and N87 billion of which were oversubscribed by investors in what the government said was a show of confidence in the sound financial footing of Lagos State and its ability to repay.
Akinkunmi, who spoke at the annual general meetings of the different series of the bond programme, which held in Victoria Island, justified the imperative of seeking financial support in form of bond issuance from reputable stakeholders as a way of addressing pressing areas of needs of Lagosians within the shortest time.
He said all the funds raised from the past series of bond had been utilised for critical infrastructural projects, some of which had already been completed while others were at different stages of completion.
He listed projects such as the jetty and terminal building at Badore and Osborne, Maternal and Child Centres at Epe and Badagry, construction of LagosHOMS, schools renovation, rehabilitation and construction of various arterial and inner roads and several others were captured and executed with the bond.
He said the magnitude of these projects and many others across the state necessitated the significant capital expenditure on average of N225 billion over the last five years, which had been funded by recurrent receipts augmented by capital borrowing.
“The state has displayed fiscal sustainability and financial independence in maintaining international acceptable thresholds on its debt sustainability position in all the key parameters, using both the Fiscal Responsibility Act as well as the Country Policy & Institutional Assessment, CPIA benchmarks of the World Bank for developing economies,” Akinkunmi said.
Assuring that the state government will always justify its borrowings with visible and commensurate infrastructure, the commissioner solicited for the continued support of the investors and partnership with the state government in its drive to sustain the state as a ‘centre of excellence.’
The state has a strong rating based on a record of disciplined debt sustainability and prudent financial management certified by professional rating organisations like The Fitch Ratings.
He said the annual general meeting was designed to acquaint bond investors of the judicious use of proceeds from the bond to positively impact the lives of Lagosians.
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