Why I borrow to manage the fifth largest economy in Africa – Fashola

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The governor of Lagos State, Mr Raji Fashola (SAN) has said there was nothing wrong about the State’s external debt profile of N160 billion. He made this known while inspecting the state of work on the construction of Light Rail Terminus at Iganmu on Wednesday.

Governor Fashola said he needed to borrow money to govern the state because of the size of the State’s economy and the demands on the present infrastructure available. He noted that ‘s economy has continued to develop and was highly rated by the international community

The governor said, “I think it was the debt management office that published the report that we have a debt of about N160 billion.

“I don’t 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.

“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. As I have said, if it is a matter of public information, we have always kept it in the public space.”

Governor Fashola noted that Lagos State Government could not have raised money through bonds without the Federal Government’s approval.

“Securities and Exchange Commission is one of Federal Government`s regulatory agencies through which we must pass.

“If they say 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.

“ I think the second tranche will be due around 2016 or 2017 and we are already making provisions. The provisions that will be there will be in excess of what is needed,“ he said.

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