Lagos issues N35bn fourth tranche development bond Q3

The fourth tranche of Lagos total N275 billion will be on offer to the public in the third quarter (Q3) of this year.

Under the fourth tranche of the multi-year infrastructure development bond, the state intends to issue N35 billion for subscription. It had in 2009 under the first tranche issued N50 billion, N75 billion in 2010 and N80 billion in 2012, which were oversubscribed.

The state had following the floating of the N275 billion bond in line with the rules and regulations reflected in the bond prospectus, established a sinking fund to which it remits 15 percent of its monthly internally generated revenue (IGR) as Consolidated Debt Service Account (CDSA) to enable it pay accruing interests and principal on the bond issuance programme. Lagos currently generates about N20 billion monthly from IGR.

Adetokunbo Abiru, the state commissioner for finance, told journalists on Wednesday in Ikeja that the balance in the sinking fund as at today stands at N68.21 billion which is being managed by various trustees to the bond. The commissioner said in line with the policy of the current administration in the state, the expected N35 billion, like the last three tranches, will be devoted wholly to infrastructural development.

“The state shall continue to maintain the healthy debt sustainability ratios of the state by always ensuring that: all forms of borrowing where and when necessary are for capital expenditure with the singular objective of expanding the economy of the state, Abiru said, adding that the state debt to its GDP ratio currently stands at 5 percent, which poses no threat at all, when viewed against the 40 percent recommended international bench mark.

Meanwhile, the state government generated about N6.28 billion from land use charge in 2012. This, according to the finance commissioner, is progressive growth from about N250 million in 2008, and made possible by a shift of focus from property enumeration to comprehensive billing of all enumerated properties, a strategy aimed at increasing compliance and revenue from the land use charge.

“The adoption of this approach positively reflected on the revenue,” Abiru said. 

 

JOSHUA BASSEY