Lagos State Governor, Mr. Babatunde Fashola, SAN, days back, assured Lagosians that he would hand over a stable and robust economy to his successor in 2015, adding that his administration has put in place measures to ensure that the incoming administration is not bogged down by financial burden.
Speaking at an interactive session with Media Executives and Government House Correspondents at the Lagos House, Fashola said Lagos is the only state in the entire federation that has an international Fitch rating of AA positive with stable outlook for the future, maintaining that it also has demonstrated the latitude to sustain its debt profile to date.
The Governor described as sheer ignorance the allegations of the opposition that the future of the State has been mortgaged with high debt profile by his administration, pointing out that every fund his administration has borrowed since inception has been committed to investments that have today raised the living standard of residents.
Noting that no government worth its name could deliver quality service to the people without borrowing, he said the important thing was for that government to work out viable debt plan to be able to service such debt, adding that the administration of his predecessor was committed by law to pay 15 percent of its monthly Internally Generated Revenue to the accounts of its trustees of the N25 billion bond it raised.
“There was a lot of opposition during Asiwaju’s time when the administration raised the bond and one of the onerous conditions imposed at that time was that the State should pledge by law that it would commit 15 percent of its monthly IGR to the account of the trustees who lent us the money. At that time, the IGR was N2.2 billion, so nobody saw an IGR of N20 billion at that time. So, we are still paying 15 percent of N18, N19, N20 billion every month into the account and management of the trustees”.
Governor Fashola, who said he paid off the bond raised by his predecessor in the first year of his administration, added that out of the N275 billion that his own administration borrowed, he has paid N50 billion with the next tranche falling due in 2017: “By the time we paid this N50 billion, we had over N80 billion in our Consolidated Account just to pay N50 billion”.
Assuring that there was no cause for alarm, the Governor declared, “Those who made those erroneous statements should know that the financing of the State is stable. The incoming Governor only has to maintain the revenue levels to pay off the debts and even borrow more if he wishes. So that is the plan”.
Elucidating on the need to borrow, especially in Lagos State, Governor Fashola, who noted that the central issue of governance is the people, pointed out that Lagos State is a megacity, not because of the infrastructure but because of it population, adding that whereas in some states one Maternal Childcare Centre was enough, Lagos State has built eight and two are still under construction.
According to him, the only way to avoid borrowing is to reduce our demand for services adding, “Our IGR has dropped now to about N18 billion a month. So, if you calculate N18 billion for 12 months, it will come to around N210 billion. If that is all we get from IGR plus may be N144 billion and N10 billion from FAAC, that will be about N330 billion. If that is all we get then we reduce our budget to that amount and we will be fine.
“But we have a budget of N489 billion; of course we also project that we will earn more. So, if we want a smaller budget we must agree that we will reduce services because government responds to the totality of the demands that it receives. So, if we must reduce services we must also agree to reduce numbers because it is all about people”, he said.
“The point, however, is that as we leave, there must be a winding down and a handing over process. But even until the last day we will be working. Up till yesterday, people were still asking for services; but there is a sense in which you know that you are transiting and don’t create too much of a burden for your successor”.
The Governor reiterated that whereas some states have a BRT that runs through one stretch of road through their corridor, his administration has extended its BRT to Ikorodu, Epe and other areas of the State, adding that once the Badagry Expressway is finished it is going there.
“It is in parts of Alimosho, Ipaja and all other bus franchises. In some states, only one ferry terminal will do, but we have built three terminals with some other small ones and it is still going. In the city of Dubai, they have only one monorail, we are building one of seven. So that is the size of the undertaking; if you don’t want to borrow, we should moderate our number so that our demands will reduce”, he said.
Speaking on the controversy surrounding the alleged missing 20 Billion dollars oil money, the Governor said it is simply about lack of accountability in the nation’s public life and how dysfunctional the system at the centre could be, adding that the story about the missing oil money emanated from an official of the government who was also an insider.
He said the matter is not being helped by the culture of silence that has descended on the audit that was carried out on the missing funds by the Federal Government, wondering why the report of the audit has not been made public.
He stated that the general drop in oil receipt to the Federation Account is affecting several states in many respects with many failing to pay workers’ wages when due and that the 2014 Lagos Budget also dropped in performance from 84 percent as at end of September to about 81 percent as at December 20 when he last checked.
On what his opinion is on the rebasing of the Nigerian economy to become the largest in Africa, the Governor said what the Federal Government has done was simply to update her records which she was not doing before.
He added that Lagos on its part from 2008 has always kept a record of her Gross Domestic Product (GDP) performance by monitoring and keeping data, adding that this informs why international agencies like Fitch was doing business with her.
“It is simply not about just rebasing the economy. We need to know and measure what we want to manage. Maybe we need to ask ourselves how come smaller economies have successfully provided fuel to their citizens on a regular basis. How impactful is the issue of the size”, he stressed.
On how the several programmes and policies put in place by the present administration could be sustained, Governor Fashola said the untold story was that needed institutional capacity to achieve that has been built over the years, explaining that while the State has been fortunate to have leaders described as “Action Governors” , the present administration is moving away from the “Action Governor” syndrome to an Action Government system where institutions are the centres of the action rather than individuals.
He said for example if the issue is about fixing roads, it would be generally known that the institution to be contacted is the Public Works Corporation and the particular officer to be contacted to fix such roads known to the public.
Responding to a question on why the light rail has not taken off, the Governor said the project is in sections and that work has been completed on one section which is Mile Two to Costain comprising about four stations among others and that work is going on to the next station which is to Marina, which will give 13 kilometres.
Governor Fashola said what many people fail to realize is that in distant locations such as Mumbai and Dubai where such projects have been embarked upon, the State has done better in terms of planning and delivery in the number of years it took to deliver.
He stressed that in the Lagos example however, the project is being solely financed by the Lagos State Government without any form of assistance from the Federal Government.
“When we are also talking about debts; that is where the money is. It is a 150 year infrastructure, you don’t build it a second time. The coaches, once you buy them would last you at least 50 years subject to maintenance, so that is where to put money. So you can’t aim to do those ambitious things and be squabbling about borrowing”, he explained.
Giving further insights into what the loans have helped to achieve, he said, “The issue should be what we borrowed money to do? We borrow money to buy fire engines and so that is where money should go, not to buy jets. The next problem is how do we power the coaches and we know what coaches we want to use. We want to use electric coaches because of the environmental issues. Where is the power? We are solving that power problem by ourselves because if we wait for them it will never happen.
“Signals on the trains must run efficiently. I think if it is going to be about twenty minutes from Okoko to Marina, they must be on schedule. You can predict them by your watch, so signals have to be correct. So all of that is still going on, but as I said to you we have not lost the desire to put it into service even before I go but those are the things that we don’t control…
“We have moved from concept drawing and design to brick and mortar, iron rod, steel and everything is there and that is the whole idea about developmental governance. It is not about what you can finish, but what you can begin and what you can plan. If you look at the Guateng Rail in Johannesburg, it was Thabo Mbeki who started it when he bidded for the World Cup, but it was completed by Jacob Zuma and that is how nations and cities should develop”, he explained.
On Mile 12 –Ikorodu Road expansion, the Governor said the work ought to have been completed by this December and is at 90 percent completion, adding, however, that delays came mainly from some community issues like relocation of dwelling buildings and others some of which have resulted in at least two court cases.
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