- Lagos state governor, Akinwunmi Ambode, has revealed why his government didn't take foreign loan in 4 years
- The governor noted that the $1.43 billion external debt stock of the state is an accumulation of loans from previous administrations
- According to Ambode, the monthly Internally Generated Revenue, which used to be N12 billion when he came into power has moved up to an average of N30bn to N35bn
Less than two months to the end of his administration, Governor Akinwunmi Ambode of Lagos state, has opened up on the state’s debt profile, saying his administration never took any foreign loan all through his four years reign.
Ambode in an interview with Business Day, said the $1.43 billion external debt stock of the state is an accumulation of loans from previous administrations, which he never added to.
Legit.ng gathered that he said despite pressure on the state’s Internally Generated Revenue (IGR) due to massive infrastructure projects, the administration set out to accomplish to cater to the growing needs of the estimated over 21 million residents of the state.
He said his background as a financial expert helped him in managing the resources of the state.
“Talking about Lagos state having the highest amount in terms of foreign loans, truth is that I have it on record that in my four years, I never took any foreign loan. So, whatever it is that they are saying about having $1.43 billion is an accumulation of loans that have been taken by successive governments.
“Remember also, these facilities that we call loans were taken at an exchange rate that was lower than N150. But again, this government that has not taken any of these facilities would pay back and has been paying back in the last four years on the new exchange rate which is like N360 because government is a continuum.
“That has immense pressure on the internally generated revenue. And when you have this pressure on the IGR that you are using to service these facilities without complaining, it means that you have been financially prudent to be able to use the remaining resources to do what you have outside there in terms of infrastructure development.
The outgoing governor added that his administration also “leveraged on the Lagos Development Plan 2012-2023 and took specific steps to improve the IGR to enable it deliver on the development plan.”
He said the monthly IGR, which used to be N12 billion when he came into power has moved up to an average of N30bn to N35bn, adding that the increment in revenue was achieved based on focus, involving improved collection machinery, expanding the tax net and an efficient civil service system.
He said: “One of the strategic instruments in that development plan is to create a financial model for Lagos state. It is not enough for us to say we are having strategic pillars of development without knowing how to fund it and so in the development plan, a growth plan for revenue generation had actually been embedded in it.
“Fortunately for Lagos, you have statistics that favour revenue growth. Lagos is the commercial capital of Nigeria; the business community in terms of population or location is here and this is like 70 percent of what is happening in Nigeria..
“Remember also when we came in, the revenue that was generated on a monthly basis was about N12 billion and then it moved to almost like N20 billion. Today, we are having an average of N30 billion to N35 billion a month but it is not as if the expansion is based on increase in rates or taxes."
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He said Lagos is also favoured by the fact that people are likely to be more attractive to the capital market and also more attractive to commercial banks and the ability to pay back would always give more resources to be able to get funding for most of these projects that we have done.
In an earlier report by Legit.ng, he National Bureau of Statistics (NBS) said Nigeria’s foreign debt stood at 25.27 billion US dollars as at 31st December, 2018.
According to the report, Lagos state has the highest foreign debt profile among the 36 states and the FCT, accounting for 5.64 per cent.
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