Lagos State government, yesterday, raised N87.5 billion bond under the Lagos State fixed rate bond (series 2), to execute the on-going construction of the blue line light rail project from Okokomaiko to Marina and expansion of the Lagos Badagry Expressway into 10 lanes.
It will be recalled that the state government commenced the debt issuance programme of N275 billion in 2009 with the issuance of N50 billion bonds which was expected to mature for payment in February, 2014.
The state governor, Babatunde Fashola, speaking at the issuance ceremony, at the State House, Alausa Secretariat, Ikeja, said that this marked the completion of the six years N275 billion debt issuance programme of the state.
According to him: “This is part of the state process of looking inwards rather than outwards for solutions to the state challenges.
“We cannot seriously ask people to invest in the country if ourselves do not show commitment, by making investment in the country. This we have done with the bonds which would be financed locally.”
Fashola added that the bond which was expected to mature in 2020, would also be used to execute other projects like: Apapa Central Business District, CBD, road networks, construction of the Adiyan Phase 11 Water works with 70 million gallons of water per day, Mushin Isolo Road, Isolo Isheri Ijegun link Bridge, completion of the Ayinke House Maternity Hospital, protection of the Atlantic shoreline from Goshen Estate to Alpha Beach.
The governor, while reacting to critics’ comments on the state bonds issuance programme, said that they were voodoo economist who did not have knowledge of bonds issuance, adding, “But I will put the fact straight.
“In 2002 when we raised N25 billion and drew N15 billion of the bonds, voodoo economists in the country complained that government had mortgaged the country for 50 years. But the projects we committed the bonds for, are still functioning even after we had repaid the bonds.
“Some of the projects are: Kudirat Abiola Way, Oregun, Akin Adesola Way, Awolowo Road, Lawanson Itire Road and others for which the loan was taken are still functioning long after the loan had been paid.
“The N50 billion bonds we raised in 2009, which was the first under this programme, I can tell you that as at today, there is already N94.6 billion in the consolidated Debt Service Account under the care of Trustee to the lenders to repay the debt next year.
“This is almost double of what we owe that is due for repayment; and the account continues to grow to meet our existing debt obligations as they fall due to payment.”
Speaking earlier, Commissioner for Finance, Mr. Ayo Gbeleyi said that this is the largest issuance ever made by any government in the country including the Federal Government, that has not issued more than N70 billion.
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