Lagos State emerged as the highest debtor among Nigeria’s federating units, both in domestic and foreign debt, according to the latest data from the National Bureau of Statistics (NBS). The report shows that in the first quarter of 2024, Lagos recorded the highest domestic debt at ₦929.41 billion, with Delta State trailing far behind at ₦334 billion.
However, Babajide Sanwo-Olu dismissed concerns over the state’s debt profile, assuring Lagosians that the borrowing level is within sustainable limits. Speaking on Channels Television’s Politics Today program, Sanwo-Olu explained that the state’s debt-to-revenue ratio remains below the national benchmark of 40%.
“The standard debt ratio we are meant to meet is about 40%, but today, we are around 28-29%, so we are not even close to the threshold,” the governor stated.
Sanwo-Olu further argued that Lagos’s current debt burden should be viewed as an investment in the state’s future. He pointed out that Lagos has the capacity to manage far higher debt, referencing a statement he made in February about the state being able to absorb ₦20 trillion in debt.
“This ₦2 trillion debt figure is just a number. Lagos has the capacity to manage up to ₦20 trillion. In fact, my team initially proposed a ₦6 trillion budget this year, but we settled on ₦2 trillion to remain prudent,” Sanwo-Olu explained.
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The governor highlighted the exponential growth of Lagos’s budget over the past five years, noting that the state has consistently achieved over 90% budget performance.
“When we came into office, we inherited a budget of ₦620 billion. Today, Lagos is working with a budget of ₦2.3 trillion, and by the end of this year, we expect to close at about ₦2.5 trillion,” Sanwo-Olu said.
Sanwo-Olu emphasized the state’s efficient financial management, stating that the state achieves 95% budget performance annually. This performance, he believes, underscores Lagos’s economic strength and ability to service its debts responsibly while driving development.
The governor’s defence of the state’s debt policy comes amid growing concerns over Nigeria’s overall public debt burden, with analysts debating the long-term sustainability of heavy borrowing at both federal and state levels.
For Sanwo-Olu, the borrowing by Lagos is part of a broader strategy to cement the state’s economic future: “Our investments today will yield returns tomorrow,” he assured.
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