The Securities and Exchange Commission (SEC) is examining the books of Lagos State government and inspecting project sites in preparatory to granting approval for a N60 billion bond to be issued by the state government before the end of 2016.
The N60 billion is part of the N500 billion fresh bond programme to be issued in series by the Governor Akinwunmi Ambode-led government to continue to fund infrastructural development in Nigeria’s economic hub.
Akinyemi Ashade, the state commissioner for finance, economic planning and budget, said at the weekend that aside the N60 billion this month, the state would also be approaching the market for N100 billion in 2017.
One of the immediate projects to be funded with proceeds from the bond will be the channelisation of the waterways aimed at expanding the scope of water transportation in the state and attracting new investors to that sub sector.
Others are the completion of the ongoing flyovers at Ajah and Abule-Egba, as well as an effective Geographical Information System (GIS) to generate credible data on land administration, which, according to Ashade, will aid planning and further enhance state’s revenue profile.
Ashade spoke with BusinessDay at the annual general meetings of the N57.5 billion (series 2-2010/2017), N80 billion (series 1-2012/2019) and N87.5 billion (series 2-2013/2020) all of which were oversubscribed, in what the government believes demonstrates investors’ confidence in the state’s robust financial ratings and ability to repay the debts.
The series are part of the N275 billion bond programme of the state government that began in 2009 under the immediate past administration of Babatunde Fashola, to finance infrastructure development. The first tranche of the fixed rate bond issued in 2009 was N50 billion, which was retired in February 2014.
“We are establishing a N500 billion bond programme limit. We will be taking it bits as the Lagos State House of Assembly approves them. Before the end of this year, we will be issuing N60 billion to intervene in critical infrastructure. With our strength in internally generated revenue, we believe we will be able to repay the debt over time,” the commissioner said.
Officials of SEC are in Lagos to see some of the projects the government intends to channel the proceeds, including schools, flyovers and channelisation of the waterways, he said. He commended the bondholders for sustained interest in the state’s bond programme.
