Governor Babatunde Fashola of Lagos State, yesterday, justified the decisions of the Lagos State Government to take a bond worth over N160 billion from World Bank, saying strategies had been put in place to ensure repayment of the loan in due period.
He said the economy of the state had recorded exponential growth over the years and had been consistently rated high by international rating agencies, insisting that criticisms that the state was borrowing too much were unfair.
Fashola said this while responding to questions from newsmen after an inspection tour of the ongoing construction of the light rail terminus at Orile-Iganmu, Lagos.
The governor who said he was satisfied with the work done so far on the project, expressed disappointment that the work did not move as smoothly as expected.
The governor who said he was satisfied with the work done so far on the project, expressed disappointment that the work did not move as smoothly as expected.
He however, expressed optimism that the project would be completed in another 12 months.
Speaking on the rationale behind the debt, Fashola said: “I think it was the debt management office of the Federal Government that published the report that we have a debt of about N160billion. I don’t know the intent of the publication but if it was to inform the public, I think we have always kept the public informed anytime we borrow money. If there are other intentions behind that, only those who make the publication would know what the intentions are.
“But you see, when people talk about debt of a state like Lagos, they forget that after Nigeria, South Africa, Egypt and one other country, we have the fifth largest economy in Africa. When you are talking of about a billion naira debt to a population of over 21 million people; because if you are measuring the debt, you also have to measure the responsibility. Those are the things people keep in isolation.”
According to Fashola, the Lagos State government already had put in place strategies for the repayment of the loan, insisting that the Federal Government was in the know of the state’s decision to take the bond and it approved it.
He said “The truth is that what they don’t also say is that no state in Nigeria can borrow money outside, from any multilateral agencies without the approval of the Federal Government. So, what they did not say is that they approved it. No state can raise money by bond the way we have done without the FG’s approval.
“Securities and Exchange Commission is one of Federal Government`s regulatory agencies through which we must pass.If they say okay, it means there must be something good about the debt.”
`Our rating as a state is the same as that of the Federal Republic of Nigeria, BB Minus-Stable with a positive outlook. We are the only state in Nigeria that has that rating.
The first bond that was taken during my first tenure has been paid, the first tranche. I think the second tranche will be due around 2016 or 2017 and we are already making provisions. The provisions that will be there will be in excess of what is needed,“
Speaking on the ongoing construction, Fashola expressed satisfaction on the job but decried the petty delay that was encountered as a result of inadequate funding, but expressed hope for the job to be completed in th next 12 months.
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