Lagos State Governor, Mr. Babatunde Fashola, SAN, Wednesday inspected progress of work at the Iganmu Terminus of the Lagos Light Rail Mass Transit project explaining that the loans obtained by the administration is used in financing such capital intensive projects as the Light rail, expansion of the Lagos-Badagry Expressway and Mile 12 – Ikorodu, among others.
Governor Fashola, who fielded questions during a media interaction with State House Correspondents after the inspection, said the projects embarked upon by his administration was aimed at adding value to the life of the average Lagosian adding that it is the only way to finance such projects.
The Governor declared, “So if the people of Lagos want rail, if they want to see a 10 lane highway on Badagry Expressway, if they want the work we are doing in Mile 12 into Ikorodu expansion to continue, if they want to see all of the developmental works that will add value to their lives, that is the only way to finance it”.
He argued that if the State does not borrow, it means it has to wait every month for those who want to pay rent, Land Use Charge, Tenement Rate, Drivers License or a parcel of land and other rents pointing out that no government could accomplish rapid development at that rate.
“If we wait, it is a bit-by-bit income. If you look at all our IGR, it is all secured against these assets. I can’t tell our contractor that wait, let me go and collect money from licensing office to come and give you. This is how it works because a contractor has designed a project which is going to benefit our people, it would cost Billions of Naira to do”, he said
The Governor said the best thing to do was go to a bank, get the money so that the contractor could be paid adding, “As the income comes in through IGR, we will use it to defray the loan and that is why the banks are lending because they see that the funds are coming in and that is how to run a government”.
Reiterating that the money borrowed goes to finance capital intensive projects for the benefit of the people, Governor Fashola told newsmen, “You can see people working on this construction site, you can see supply and you can see labourers. That is how an economy works, people are taking value from government infrastructure initiative, from government borrowing funded by tax payers money so anybody who is worried must either not know his economics or must have a voodoo intention to achieve”.
He expressed pleasure at the progress of work so far at the project adding, however, that the project suffered the delays in terms of the fact that it is a large and complex project. He expressed the hope that work on the project could move faster.
The Governor said much progress has also been made at the Mile 2 end of the project, where work started the last time, to the Iganmu end which is about seven kilometres, adding, “Track has been constructed, the rail has been laid and four stations are now completed”.
He noted that what is currently being done is to cross the water to the final station in Marina “which is another five kilometres of heavy construction work, concrete and iron rods”.
“They have to build 150 piles across before we can get there. This should come to another 12 months to get to Marina because we have suffered delays. They have to pass through existing properties to get permission, Right of Way and compensation issues; but we are making progress”.
Governor Fashola noted that with the contract and the financing in place, the only thing left was how much time to log on to on a day to day basis, adding the State Government has always come to the public when it was raising Bonds and were never conducted under the table.
Speaking further on the recent publication that Lagos owes a huge amount of foreign debt, the Governor noted that his administration had never borrowed secretly adding, “When we were doing the DPO you were there. I have been to the House of Representatives to say that we have a loan application with the World Bank for 600 million Dollars”.
Governor Fashola maintained that Lagos is the only sub -national government in Africa that has benefitted from such a facility adding, “Of all the sub-national governments in the whole of Africa, we are the only beneficiary government. The only other two countries where their sub-nationals have benefitted is in Brazil and in India”.
He explained further, “The thing to understand is that there was a debt of about One Billion Dollars which is roughly around N160 Billion. I could not decipher the intent and purpose of the publication, but if it was to inform the public, the State has always kept the public informed every time she borrowed money and if there were other intentions, only those who make the publications will know what their intentions are”.
The Governor added that when people talk about debt of a State like Lagos they forget that after Nigeria, South Africa and Egypt and one other country in Africa, Lagos is the fifth largest economy in the whole of Africa adding, “When people are talking about one Billion Dollars debt to a population of 21 million people, they should also be measuring the responsibility as the debt is being measured and should not be kept in isolation”.
“Our rating as a State is the same as Federal Republic of Nigeria-BB Minus stable, with a positive outlook and we are the only State in the Federal Republic of Nigeria that has that rating,” he emphasized.
Governor Fashola explained that what those who have been publishing the debt profile do not say is that no state in Nigeria can borrow money from any other multi- national agency outside the country without the Federal Government’s approval.
“So 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 approval. They would not do it. The Security Exchange Commission (SEC)and the Nigeria Stock Exchange (NSE) are all Federal Government regulatory bodies through which we must pass. So if they say okay, it must mean that there must be something good about that debt”, he said.
He noted that the first tranche of the Bond that was taken during first tenure has been paid, adding that the next one would fall due around 2016 or 2017. “We are already making the provisions and the provision which will be there will be in excess of what will be needed to pay it”, he added.
Speaking on what support the State has received from the Federal Government Fashola said there has been no support by way of direct cash support as the projects are being carried on with the State’s strength and with the support of the people of Lagos who pay taxes, adding that Lagos has taken her destiny into her own hands.
“As a Federal Government, we can’t borrow money outside the country without them giving us the approval and that is all and even at that in the last two years, there were a lot of delays and frustration which led to my going to the House of Representatives to get them to pass this and even now may be this week the credit was finally made and so we are going to pay as a State not the Federal Government”, he explained
According to him, “Nobody has done us any favour. The law just says that if any part of the country is going to borrow money, the country must approve but the debt is our own and that is why they are publishing and we acknowledge it as our debt. We have never moved away or denied it”.
“We have always said we took the money and this is part of where the money is going. You can see people constructing, you can see supply and you can see labourers. That is how an economy works, people are taking value from government infrastructure initiative, from government borrowing funded by tax payers money so anybody who is worried must either not know his economics or must have a voodoo intention to achieve”, he reiterated.
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Governor Fashola, who fielded questions during a media interaction with State House Correspondents after the inspection, said the projects embarked upon by his administration was aimed at adding value to the life of the average Lagosian adding that it is the only way to finance such projects.
The Governor declared, “So if the people of Lagos want rail, if they want to see a 10 lane highway on Badagry Expressway, if they want the work we are doing in Mile 12 into Ikorodu expansion to continue, if they want to see all of the developmental works that will add value to their lives, that is the only way to finance it”.
He argued that if the State does not borrow, it means it has to wait every month for those who want to pay rent, Land Use Charge, Tenement Rate, Drivers License or a parcel of land and other rents pointing out that no government could accomplish rapid development at that rate.
“If we wait, it is a bit-by-bit income. If you look at all our IGR, it is all secured against these assets. I can’t tell our contractor that wait, let me go and collect money from licensing office to come and give you. This is how it works because a contractor has designed a project which is going to benefit our people, it would cost Billions of Naira to do”, he said
The Governor said the best thing to do was go to a bank, get the money so that the contractor could be paid adding, “As the income comes in through IGR, we will use it to defray the loan and that is why the banks are lending because they see that the funds are coming in and that is how to run a government”.
Reiterating that the money borrowed goes to finance capital intensive projects for the benefit of the people, Governor Fashola told newsmen, “You can see people working on this construction site, you can see supply and you can see labourers. That is how an economy works, people are taking value from government infrastructure initiative, from government borrowing funded by tax payers money so anybody who is worried must either not know his economics or must have a voodoo intention to achieve”.
He expressed pleasure at the progress of work so far at the project adding, however, that the project suffered the delays in terms of the fact that it is a large and complex project. He expressed the hope that work on the project could move faster.
The Governor said much progress has also been made at the Mile 2 end of the project, where work started the last time, to the Iganmu end which is about seven kilometres, adding, “Track has been constructed, the rail has been laid and four stations are now completed”.
He noted that what is currently being done is to cross the water to the final station in Marina “which is another five kilometres of heavy construction work, concrete and iron rods”.
“They have to build 150 piles across before we can get there. This should come to another 12 months to get to Marina because we have suffered delays. They have to pass through existing properties to get permission, Right of Way and compensation issues; but we are making progress”.
Governor Fashola noted that with the contract and the financing in place, the only thing left was how much time to log on to on a day to day basis, adding the State Government has always come to the public when it was raising Bonds and were never conducted under the table.
Speaking further on the recent publication that Lagos owes a huge amount of foreign debt, the Governor noted that his administration had never borrowed secretly adding, “When we were doing the DPO you were there. I have been to the House of Representatives to say that we have a loan application with the World Bank for 600 million Dollars”.
Governor Fashola maintained that Lagos is the only sub -national government in Africa that has benefitted from such a facility adding, “Of all the sub-national governments in the whole of Africa, we are the only beneficiary government. The only other two countries where their sub-nationals have benefitted is in Brazil and in India”.
He explained further, “The thing to understand is that there was a debt of about One Billion Dollars which is roughly around N160 Billion. I could not decipher the intent and purpose of the publication, but if it was to inform the public, the State has always kept the public informed every time she borrowed money and if there were other intentions, only those who make the publications will know what their intentions are”.
The Governor added that when people talk about debt of a State like Lagos they forget that after Nigeria, South Africa and Egypt and one other country in Africa, Lagos is the fifth largest economy in the whole of Africa adding, “When people are talking about one Billion Dollars debt to a population of 21 million people, they should also be measuring the responsibility as the debt is being measured and should not be kept in isolation”.
“Our rating as a State is the same as Federal Republic of Nigeria-BB Minus stable, with a positive outlook and we are the only State in the Federal Republic of Nigeria that has that rating,” he emphasized.
Governor Fashola explained that what those who have been publishing the debt profile do not say is that no state in Nigeria can borrow money from any other multi- national agency outside the country without the Federal Government’s approval.
“So 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 approval. They would not do it. The Security Exchange Commission (SEC)and the Nigeria Stock Exchange (NSE) are all Federal Government regulatory bodies through which we must pass. So if they say okay, it must mean that there must be something good about that debt”, he said.
He noted that the first tranche of the Bond that was taken during first tenure has been paid, adding that the next one would fall due around 2016 or 2017. “We are already making the provisions and the provision which will be there will be in excess of what will be needed to pay it”, he added.
Speaking on what support the State has received from the Federal Government Fashola said there has been no support by way of direct cash support as the projects are being carried on with the State’s strength and with the support of the people of Lagos who pay taxes, adding that Lagos has taken her destiny into her own hands.
“As a Federal Government, we can’t borrow money outside the country without them giving us the approval and that is all and even at that in the last two years, there were a lot of delays and frustration which led to my going to the House of Representatives to get them to pass this and even now may be this week the credit was finally made and so we are going to pay as a State not the Federal Government”, he explained
According to him, “Nobody has done us any favour. The law just says that if any part of the country is going to borrow money, the country must approve but the debt is our own and that is why they are publishing and we acknowledge it as our debt. We have never moved away or denied it”.
“We have always said we took the money and this is part of where the money is going. You can see people constructing, you can see supply and you can see labourers. That is how an economy works, people are taking value from government infrastructure initiative, from government borrowing funded by tax payers money so anybody who is worried must either not know his economics or must have a voodoo intention to achieve”, he reiterated.
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