imageThe immediate past Lagos State Governor, Mr. Babatunde Fashola, formally bowed out of office on Thursday, leaving behind a huge debt burden of N418.2 billion for his successor, Mr. Akinwunmi Ambode.

However, Fashola pledged to support Ambode’s administration and give assistance in any assignment he might be asked “to undertake in order to defend the course of Lagos State and protect the interests of its over 21 million residents.”

He expressed his support while transiting the spectre of the state’s power formally to Ambode at the State House, Alausa about eight hours and 30 minutes to the expiration of his eight-year administration on Thursday.

But a document from the state Ministry of Finance revealed that the state government under the Fashola administration had a debt stock of N418.2 billion compared to about N15 billion left behind by Bola Tinubu.

As indicated in the document, the Fashola administration had a domestic debt of N69.666 billion; N225 billion debt from bond issuance and N207.499 billion from external loan from foreign bodies, though the state had a sinking fund of about N100.73 billion.

The document showed that the internal loans from commercial banks “have tenors of four to six years, while the multilateral financing agencies including the World Bank, French Development Agency and others, are on concessionary borrowing terms, such as 20 – 40 years tenor and average of 1.75 per cent per annum interest rate.”

On the bond, the document showed that the state government under the immediate past governor issued a bond of N275 billion, though N50 billion had been paid from the total sum in 2014, thus leaving a balance of N225 billion.
On the domestic debt, the document stated that incurred about N69.666 billion, indicating that the Ambode administration “is expected to pay N14.27 billion this year; N13.68 billion in 2016; N34.68 billion in 2017 and the balance of N6.85 billion in 2018.

“On the overall loan, the mode of payment is that Ambode would pay N15.96 billion in 2015; N16.796 billion in 2016; N48.57 billion in 2017 and N10.644 billion in 2018. The debt will be serviced the remaining debt with N59.313 billion in 2019 and N86.54 billion in 2020 as the remaining N180.397 billion would transcend beyond 2020.”

However, the Fashola administration defended the state’s debt burden, noting that its debt profile “is sustainable. The rating agencies including Agusto and Co, Global Credit Rating, (GCE), and Fitch Ratings attest to the debt sustainability. The state’s huge debts are sustainable it will not be a burden to the incoming government.”

It argued that the total revenue of the state government currently “stands at N33.95 billion monthly compared to N27.82 billion monthly it generated in 2011 as the internally generated revenue (IGR) averages 65 per cent of total revenue with Statutory Allocation plus Value Added Tax (VAT) being circa 35 per cent.

Meanwhile, in Kano State, the Chairman of the 93-man transition committee inaugurated by the Kano State Government, Professor Hafizu Abubakar, has disclosed that the state government is committed to a whopping outstanding debt of N117billion for projects executed and those on various stages of completion from 2011 to date.

Presenting the committee’s report to the governor-elect Dr. Abdullahi Umar Ganduje, at the Government House yesterday, Abubakar stated that the financial status of the state had proven the fact that Kano was facing a difficult condition in the face of the dwindling grants accruing to the state from the Federation Account coupled with the abysmal decline of the IGR.

He said Kano had in the last four years received a total grant of N419 billion and spent N418 billion, saying the state was only receiving 30 per cent grants from the Federation Account and left to grapple with the herculean task of generating internal revenue which is abysmally low.

He further revealed that the committee had left no stone unturned in meeting the expectation of the state government considering the degree of unfettered confidence reposed in its members stressing however that the assignment was also tedious as the issue of collating reliable data was a painstaking job.

In his remarks, the state governor-elect Dr. Abdullahi Umar Ganduje said he would consider the findings of the committee as a guide to him in forging ahead, affirming that he would also be inspired by the findings to know where to start.

He said with the confidence reposed in the committee’s chairman, Abubakar and the calibre of members of the committee, he was not surprise with the findings, stressing that his government would also set up a special committee to summarise what was contained in it in order to pave the way for his government to forge ahead.
This Day

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