Akinwunmi Ambode, governor of
Lagos state, says his administration never took a foreign loan during his
four-year tenure.
In an interview with BUSINESS
DAY, Ambode said the $1.43 billion external debt stock of the state is an
accumulation of loans from previous administrations, which he never added to.
He said his background as a
financial expert helped him in managing the resources of the state.
Ambode said despite the fact that
servicing the loans has an “immense pressure” on the internally generated
revenue of the state, his administration was able to use the remaining
resources of the state to embark on infrastructural development.
“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,” Ambode said.
“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.
“That is the way to explain what
has been happening and the value that comes with the infrastructure that we are
giving.
“It is like double the price of
what we are putting inside when you match the issues about loans and resources.
Remember also that the country was going into recession when we came in.”
The outgoing governor added that
his administration also “leveraged on the Lagos Development Plan 2012-2023 and
took specific steps to improve the IGR to enable it deliver on the development
plan.”
‘IGR HAS RISEN FROM 12 BILLION TO
30 BILLION’
He said the monthly IGR, which
used to be N12 billion when he came into power has moved up to an average of
N30bn to N35bn, adding that the increment in revenue was achieved based on
focus, involving improved collection machinery, expanding the tax net and an
efficient civil service system.
“One of the strategic instruments
in that development plan is to create a financial model for Lagos state,” he
said.
“It is not enough for us to say
we are having strategic pillars of development without knowing how to fund it
and so in the development plan, a growth plan for revenue generation had
actually been embedded in it.
“Fortunately for Lagos, you have
statistics that favour revenue growth. Lagos is the commercial capital of
Nigeria; the business community in terms of population or location is here and
this is like 70 percent of what is happening in Nigeria..
“Remember also when we came in,
the revenue that was generated on a monthly basis was about N12 billion and
then it moved to almost like N20 billion.
“Today, we are having an average
of N30 billion to N35 billion a month but it is not as if the expansion is
based on increase in rates or taxes.
“What has been done is just
improvement in collection machinery and then expanding the tax net and the
ability to put people together and run an efficient civil service system that
was able to tap into those things; and then more importantly, investing in
technology to be able to carry out some of these collections.
“Yes, revenue has improved
tremendously but obviously it is based on focus, and it is based on the ability
to match those needs in terms of development and economic growth with how to
fund it.
“Lagos is also favoured by the
fact that because of the dynamics that we have, we are likely to be more
attractive to the capital market and also more attractive to commercial banks
and the ability to pay back would always give you more resources to be able to
get funding for most of these projects that we have done.”
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