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Lagos Debt Profile Now N874.38bn; Manageable – LASG I The Precision

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Comm. for Finance, Ashade (m), addressing journalists
during the on-going 2018 ministerial press briefing in Lagos
By Kazeem Ugbodaga
The Lagos State Government on Monday said its current debt profile of
NN874.38 billion is manageable and that the debt service charge to
total revenue ratio is still within the World Bank threshold of 30%.

Commissioner for Finance, Akinyemi Ashade disclosed this on Monday at
a ministerial press briefing in Alausa, Ikeja, Lagos, Southwest
Nigeria.
According to Ashade, the Lagos State Government debt stock-to-GDP as
at 2016 had been maintained at 2% from 2015, while reported total
debt-to-total revenue in 2016 was 150% from 129% in 2015; both ratios
being well below the World Bank thresholds of 40% and 250% respectively.
“Our reported net debt stock, comprising of 48% local debt and 52%
foreign debt, amounted to N874.38bn at the end of 2017, while the debt
service charge to total revenue ratio, which stood at 17.61% compared to
13.32% in 2016 and 12.45% in 2015, is still within the World Bank
threshold of 30%,” he said.
On the bond issuance programme, the commissioner said the government
established a multi-year infrastructural development bond of N500
billion out of which the State had issued a cumulative amount of N132.14
billion, saying that the first tranche of N47 billion was issued in
December 2016, while the second tranche of N97 billion was issued in
August 2017.
“The sustained interest in the Lagos State Government Bond Issuance
Programme is a confirmation of investors’ confidence in the State
Government and its instruments. As at 28 February 2018, the State
Government had accumulated over N36.7 billion in the Sinking Fund
accounts managed by independent trustees towards the redemption of
existing bonds, with the next set of bond tranches of N80 billion and
N87.5 billion set to mature in November 2019 and 2020 respectively,” he
said.
However,
Ashade disclosed that the government had so far achieved an average
monthly Internally Generated Revenue (IGR) of N34 billion 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 N50 billion 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 State, the Government had received a total of N327 million
revenue, comprising N197 million and N130 million 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 N51 billion 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.

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The
commissioner said the State Government has 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
surpass to surpass the sovereign rating,” he said.
He,
however, said that the State Government has 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 have been received.
He
said the extensive discussions led to several concessions on Land Use
charge for property owners across board, adding that a revised bill to
further amend the LUC Law to incorporate the additional concessions was
presently before the House of Assembly and would be passed soon.
Besides,
the commissioner said the Government through the LUC Assessment Appeal
Tribunal, received a total of 1,503 complaints, out of which 1,113 were
successfully resolved administratively and through mediation, adding
that an additional 263 property owners/agents had their grievances
resolved in the last two weeks and more still ongoing.
Ashade
also urged residents to continue to support the government by
fulfilling their civic duty of paying their taxes and remitting all
taxes collected on behalf of the Government as and when due, assuring
that the present administration was committed to maintaining financial
accountability and transparency for the overall development and
prosperity of the State. (PM News)

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