The planned by the Lagos State government to raise N250 billion through loans and bonds has continued to generate controversy and concerns by many stakeholders in the commercial never of the country.
Sanwo-Olu said lack of sufficient revenue for the remaining months of the year and not being in a position to propose a supplementary budget informed a re-ordering of the 2019 budget and made it necessary to consider the bond option.
According to the governor, the state will raise N100 billion fixed-rate bond and internal loan of N150 billion to finance some road projects in the state.
He explained that the budgetary provisions of recurrent and capital budget of ministries, departments and agencies were not likely to be utilised before the end of the year, saying that N34.050 billion could be re-ordered. The governor argued that the budget as at 31st August 2019 had a 71 percent overall performance, which was below the set target of 100 per cent while further analysis showed that the recurrent expenditure stood at 80 percent while capital expenditure was at 64 percent performance, portending a 49:51 capital/recurrent ratio against the target of 55:45, among others.
However, the governor’s explanation seems not to have gone down well with some stakeholders, who complained that the level of infrastructure development in Lagos over years has not been commensurate with the volume of loans the ruling party had obtained since 1999.
The state’s chapter of the Peoples Democratic Party (PDP) therefore called on the Assembly to reject the request, saying any attempt by the lawmakers to approve the loan would be a declaration of a vote of no confidence on themselves.
The Publicity Secretary of Lagos PDP, Taofik Gani called on the citizens to reject the loan.
“The request was made under very unclear needs and unless the governor allows public defense of it, we hold that 60 percent of the sought loan is to be shared amongst the governor, the lawmakers and notable chieftains of the APC, essentially to placate the chieftains of the ruling party.”
According to the PDP, the governor had in his loan request letter stated that the state would have no new Internally Generated Revenue (IGR) for the remaining months in the year.
“We declare this assertion as very uninformed and a deliberate to divert the state IGR. We have intelligence report that the state IGR is now between N60 to N70 billion monthly, but that the actual collections are never made public.”
The party urged the Assembly to summon the governor and his Commissioner for Finance to explain how the state would not have IGR for the remaining months in the year. “Indeed the time is due for Alpha Beta Company to be reappraised and brought to account,” the party added. Lagos gubernatorial candidate of the Action Democratic Party (ADP) in 2019, Babatunde Olalere Gbadamosi urged the people of Lagos to be on the alert over the planned bond. According to him, “When Sanwo-Olu took over power and promised to re-ordered the budget of his immediate predecessor, Akinwunmi Ambode, what came to my mind was that he intended to downsize the budget like what Governor Seyi Makinde did in Oyo State. But with what is happening it is as if he (Sanwo-Olu) lied to the people of Lagos during the debate we had before the governorship election.”
The ADP flag bearer said another challenge with governance in Lagos under the APC was the lack of transparency in budget implementation. He said that there was no detail as to how the money is being applied and how they intend to spend it.
On the N250 billion bond, Gbadamosi refrained from doing an appraisal, saying, “I don’t know what the loan is meant to be for and even if they explained, there is a reason to be skeptical considering what has happened to loans obtained by the ruling party in the past. My fear is that the loan is a local debt of which interest rate will not be lesser than two digits. We are worried about the future of Lagos.”
He, however, said that the manner with the state had been administered under the control of APC in the last 20 years would require the electorate to stand up and yawn for a change. “We cannot continue to have governments that would be obtaining loans to cater for the well being of APC leaders,” he added.
Gbadamosi also said the reason Sanwo-Olu could not borrow from outside was because the government had exhausted its goodwill, hence the need to resort to local debt.
Another gubernatorial candidate in the state, Ayodele Akele, who contested on the platform of the National Conscience Party (NCP), also expressed concern over the planned loan. He specifically tasked the state lawmaker to scrutinise the loan before giving its the nod.
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