- Govt owes over N400bn, remains highest indebted state in Nigeria
Lagos State Government has offered robust explanations into the reasons why it has continued to incur an alarming debts profile, in spite of its generous revenue generations.
With over N435billion debts already, analysts are worried that the state, the most indebted in the country, still planned to incur about N5billion foreign loans in its 2014 budget, in spite of it’s over N20billion monthly Internally Generated Revenue (IGR), about N5billion federal allocation and numerous grants from various international development partners.
At an on-going media briefing midweek, as part of activities to commemorate the 7th anniversary of Governor Raji Fashola’s (SAN) administration, Commissioner for Economic Planning and Budget, Mr Ben Akabueze, said most of the debts, which were obtained on irresistible interest and moratorium bargains, were incurred by the state primarily to fund several on-going infrastructural development projects and invest in long-term businesses for the good of the people.
He however explained that statistically, most of the funds, obtained as long-term serviceable bonds, do not necessarily infer accumulation of more debts, as the large junk of them were being used to offset some outstanding loans with strangulating conditions.
According to him: “ In management, there are development plans, which affords you the opportunity to take more loans and service the outstanding ones without necessarily increasing your loan net worth.
“For instance, the Development Operational Loans of the World Bank were designed to support our infrastructural development projects and if you quite understand the favourable terms behind the loans, say the five years moratorium and others, you will agree with the government.”
Akabueze also added that in its 2014 budget, Lagos State Government projected to secure a foreign loan to the tune of N3billion.
Giving the budget performance report of the immediate past year, which was pegged at N507.105billion, Akabueze boasted that his ministry was able to record a satisfactory 85 per cent overall performance.
He added that concerted efforts are being made currently to ensure that the N255.025billion earmarked for capital projects against N234.665billion recurrent expenditure in the 2014 budget of N489.690billion are judiciously utilised to meet the yarning and aspirations of the good people of Lagos.
According to him: “This government has made it clear that it lacks the financial resources to fix all the roads in the state. As we speak, there are about 10,000 roads in the state and as we speak, less than 50 per cent is being attended to and the cost of construction is more costly because of the peculiar state of Lagos. We are below sea level, which makes whatever materials we wants to use to be the best of the best to withstand the test of time
“In all of these however, road construction has the largest line of expenditure. Yet, all our construction projects are ongoing. There in none, to my knowledge, that is abandoned. And that is why I always disagree when people say the government is so rich and there is no need to further seek loans.”