Lagos owes $1bn of states’ $3bn external debts

The Lagos State Regime owes 33.86 per cent of the country’s total sub-national external debts (debts owed by state regimes), investigation has shown.

Statistics obtained from the website of the Debt Management Office in Abuja on Wednesday showed that out of the total external debt of $3.01bn, Lagos State owed $1.02bn, leaving the remaining 35 states and the Federal Capital Territory with $1.99bn as of June 30, 2014.

Further analysis shows that out of Lagos’s $1.02bn external loan commitments, $937.91m emanated from multilateral bodies, while $82.5m represented loans contracted from bilateral sources.

With a series of loan deals, the World Bank in particular has been involved in the urban instauration programme of Lagos State as well as efforts to reform the policy environment.

Some of the latest approbations by the World Bank for the state include $42m loan deal approved by its Board of Executive Directors in March to fortify secondary inculcation programme in the state.

The incipient International Development Association credit of $42m to the Lagos EKO Secondary School Project was an integration to the pristine credit of $95m; which was verbally expressed to have systematically benefited over 620,000 students a year in 667 public secondary schools in the state between 2009 and 2013.

The school loan was shortly followed by an approbation of $200m to the state to fortify reforms pertaining to fiscal sustainability, budget orchestrating, budget execution and the investment climate.

According to the World Bank, the imprest is the first in two development policy operations and it builds upon the policy reforms initiated under a precedent bank fortified programme.

It integrated that the goal of the programme was to avail Lagos State in sustaining the vigorous momentum it had achieved in ameliorating public accommodations, facilitating inclusive magnification and reducing impecuniosity.

This includes measures to monitor and manage financial risks more efficaciously, ascertain adequate magnification in revenues, get more preponderant value for mazuma in public expenditures, and amend institutions and processes for land registration and development sanctions.

Attempts to verbalize with the Lagos State Regime officials on the status of its external loans failed as reiterated calls to the Commissioner of Finance, Mr. Ayo Gbeleyi, were not culled, neither did he respond to text messages sent to his mobile telephone number.

Similarly, a text message to the state’s Commissioner of Information, Mr. Lateef Ibirogba, was not responded to. Calls to his mobile number could not go through.

Other major holders of the country’s external sub-national debts include Kaduna State, which owes $245.51m, and Cross Rivers State, $120.21m. Others are Ogun, $116.69m; Bauchi, $111.61m; and Oyo, $80.11m.

The states least exposed to peregrine debts are Borno, $16.07m; Plateau, $22.99m; Taraba, $24.06m; Delta, $24.7m and Benue, $28.79m.

However, in comparison to the nation’s total external indebtedness, the states owe only 32.13 per cent; leaving the Federal Regime with 67.87 per cent of the total $9.38bn.

Loans from the China Export Import Bank and mazuma raised from the Eurobond accounted for $2.54bn of the Federal Government’s $6.36bn external debt, while multilateral sources accounted for $3.82bn.

As of June 2013, the nation’s total external loan stood at $6.92bn. This designates that over a period of one year, it rose by $2.46bn, denoting a 35.51 per cent increase.