The outgoing Lagos State Governor, Akinwunmi Ambode, has explained that the current foreign debt owed by the State Government was inherited from previous administrations before his tenure which began in 2015.
This is a clear attempt by Governor Ambode to distance himself and his administration from the $1.43 billion foreign debt which the Lagos State Government currently owes. According to him, during his four-year tenure, his administration never took foreign credit facility to run State activities.
The Governor, who made the disclosure during an interview, said that despite the numerous infrastructure the State Government had planned for the development of the State, the state’s Internally Generated Revenue (IGR) did not seek foreign option for financial support.
Before Governor Ambode’s administration, the State was governed by Bola Tinubu (the National Leader of the All Progressive Congress party) from 1999 to 2007, while Babatunde Fashola (the current Federal Minister of Power, Works and Housing) governed from 2007 to 2015. All the Governors belong to the same political party, the All Progressive Congress.
Statistics from the Debt Management Office (DMO) shows Lagos State’s total external debt stock as at 31 December, 2018 stood at $1.43 billion. The external debt comprised of $1.28 billion from multilateral sources and $143.83 million as bilateral, sourced mainly from the African Development Bank.
How Governor Ambode managed without foreign capital: Governor Ambode in his reaction to the State’s foreign debt said he was able to manage Lagos State’s finances due to his financial background and his experience as accountant-general for the State’s civil service before he emerged Governor.
Rather than piling up the debt, Governor Ambode said he was financing the debt during his tenure which will end in May 2019. He will be handing over to Governor-Elect Babajide Sanwo-Olu (APC), who won the State election in March, 2019.
“TALKING ABOUT LAGOS STATE HAVING THE HIGHEST AMOUNT IN TERMS OF FOREIGN LOANS, TRUTH IS THAT I HAVE IT ON RECORD THAT IN MY FOUR YEARS, I NEVER TOOK ANY FOREIGN LOAN. SO, WHATEVER IT IS THAT THEY ARE SAYING ABOUT HAVING $1.43 BILLION IS AN ACCUMULATION OF LOANS THAT HAVE BEEN TAKEN BY SUCCESSIVE GOVERNMENTS.
“REMEMBER ALSO, THESE FACILITIES THAT WE CALL LOANS WERE TAKEN AT AN EXCHANGE RATE THAT WAS LOWER THAN N150. BUT AGAIN, THIS GOVERNMENT THAT HAS NOT TAKEN ANY OF THESE FACILITIES, WOULD PAY BACK AND HAS BEEN PAYING BACK IN THE LAST FOUR YEARS ON THE NEW EXCHANGE RATE WHICH IS LIKE N360 BECAUSE GOVERNMENT IS A CONTINUUM.
“THAT HAS IMMENSE PRESSURE ON THE INTERNALLY GENERATED REVENUE. AND WHEN YOU HAVE THIS PRESSURE ON THE IGR THAT YOU ARE USING TO SERVICE THESE FACILITIES WITHOUT COMPLAINING, IT MEANS THAT YOU HAVE BEEN FINANCIALLY PRUDENT TO BE ABLE TO USE THE REMAINING RESOURCES TO DO WHAT YOU HAVE OUTSIDE THERE IN TERMS OF INFRASTRUCTURE DEVELOPMENT.”-AMBODE.
Meanwhile, the state’s total domestic debt stock was N530.24 billion this period in 2018