Lagos: How We Spent N160bn World Bank Loan on Light Rail Project

The Lagos State Government yesterday justified the N160 billion it borrowed from the World Bank, noting that the fund was channelled to finance its light rail (blue line) project.

However, the state government expressed disappointment at the progress of the project, which it said, was not executed as smoothly as possible, but was optimistic of its completion.

The state Governor, Mr. Babatunde Fashola, said this shortly after inspecting the light rail terminus at the Orile-Iganmu part of the state alongside some members of the state executive council.

Speaking with journalists, Fashola said the project would have been completed in another 12 months despite that the project execution was not as smooth and speedy as he wanted it.

The governor raised questions on the

intention of the federal government for publishing the state debt profile in the recent time, wondering what could have informed the decision to make it public.

He 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 do not 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.”

He, therefore, explained that the state government already “has in place, strategies to repay the loan. The federal government was in the know of the state’s decision to take the bond and it approved it.”

He added that the truth “is that what they do not also say is that no state in Nigeria can borrow money outside, from any multilateral agencies without the approval of the federal government.

“What they did not say is that they approved it. No state can raise money by bond the way we have done without the federal government’s approval. Both SEC and NSE are all federal regulatory agencies through which we must pass. If they said 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 has been paid.

“I think the second tranche will be settled around 2016 or 2017. We are already making provisions. The provisions that will be there will be in excess of what is needed,” the governor said

Fashola expressed satisfaction on the progress of the light rail project, though decried the petty delay that was encountered as a result funding, saying the project would have should have been completed in another 12 months.

Thisday