•Lists infrastructure projects to benefit from the bond
The Lagos State Governor, Mr. Akinwunmi Ambode, yesterday explained the modalities of N500 billion programme, which the state House of Assembly approved on Tuesday for issuance.
Contrary to the misrepresentation of the bond programme, the governor said the bond was a pool of fund objectively structured for a period of time and not just for the 2016 fiscal year.
He explained the tenure of the bond programme in a statement yesterday, noting that it was imperative pertinent “to clarify the programme because it has been technically misrepresented.”
Since 2007, the governor noted that the state had two bond issuance programmes, adding that the latest programme the assembly was the third and would run for a period of three to five years.
Under the current fiscal regime, Ambode disclosed that the state “can only draw N60 billion from the pool of N500 billion. The state will draw from the fund for subsequent years as approved by the assembly.
“Before you can actually even appropriate it in your budget, you need the programme. And the programme was what was approved by the assembly. But in the 2016 fiscal year, what is in the appropriation law is just N60 billion. So, it is from this programme that we are pulling out N60 billion.
“For the next fiscal year, if the assembly approves for instance N80 billion as bond, we do not need to go back to the assembly again after they have approved that budget, you draw from that issuance programme and take another amount which is approved for 2017 budget.
“If they approve any amount for 2018 budget, for instance, you take from the pool of N500billion, which can take the next five to 10 years. So, it is just a lump sum which you now draw down based on the authorisation by the House. That is the technical explanation.
“It is not as if the state wanted to go and take another N500 billion. It is just a requirement by Securities and Exchange Commission (SEC) so that you follow the procedure on a yearly basis.”
Ambode, therefore, assured that the N60 billion bond programme approved for the current year would be used to accelerate the aggressive infrastructural development ongoing in the State.
He listed the projects to benefits from the bond programme to include the completion of Ajah and Abule-Egba flyovers, the construction of Pen Cinema flyover, more lay-bys and bus parks, the improvement of health facilities and the building of more public schools.
He explained that the financial arrangement of the state “is such that bond programmes embarked upon are easily repayable through Internally Generated Revenue (IGR). All we are just doing is to accelerate development for the future prosperity of Lagos.”
The assembly had on Tuesday approved the sum of N500 billion worth of bond for the state government spanning between 2016 and 2019, which according to the legislature, was necessary for the development of the state and that 23 percent of its IGR would be used to fund it.