Written by Kunle Awosiyan, Lagos
Friday, 20 May 2011
Lagos State Government has been enjoying over $500 million (N74 billion) loans from multilateral financing organisations and public-private partnership at significantly low rates, the state Commissioner for Finance, Mr Rotimi Oyekan, has said.

He said this at the annual ministerial news conference to mark four years of Governor Babatunde Fashola’s administration on Thursday.

The commissioner noted that the loans had complemented the debt issuance programme and helped deepen the financial resources of the state, especially in social sectors such as education, urban renewal and health.

According to him, the state had obtained $200 million, the largest World Bank direct funding for sub-national government to date for its Metropolitan Development and Governance Project.

The loan, whose payment would span between seven and 10 years, the commissioner said, would assist the government to increase sustainable access to basic urban services through investments in critical infrastructure.

Oyekan stated that the government also obtained $100 million from French Development Agency for the development of an efficient transportation system tagged, “Lagos Urban Transport Project.”

Another $200 million was obtained from the World Bank for the state Development Policy Operation, which the commissioner said would be granted to the state for three consecutive years.

Meanwhile, Lagos State Government has generated over N3 billion on property taxation in the last one year, the state Commissioner for Finance, has revealed.

According to him, the revenue collected under Land Use Charge has impressively increased from about N250 million in 2007 to N500 million in 2008 and N2 billion in 2009 to N3.02 billion in 2010.

http://tribune.com.ng/index.php/news/22261-lagos-procures-n74bn-external-loans-generates-n3bn-on-land-use-charge

This World Bank is a pretty damn good friend of Lagos.

Kudos to this French Development Agency too.

In addition, he said it is important that the state government find a way to reduce its recurrent expenditure, reduce the cost of hiring consultants, and develop other sources of income, if the dream of ending perpetual deficit budget is to be feasible.

“The state government seems fixated on personal income tax alone. But there are other means of revenue that could be developed,” he said. “For instance, the Land Use Charge alone, considering the number of houses in Lagos, can give the state more than income tax can generate.”

http://234next.com/csp/cms/sites/Next/Home/5702607-146/story.csp


Again, I will just like Eko Ile and Gbawe to expalin this perceived gaffe in Fashola's administration. For me, the cost of maintaining Lagos State's bureaucracy is unnecessarily high.

I don't see how the "cost of hiring consultants" will be realistically reduced. There are just certain political realities we have to deal with.

If the FG was weak and were less able to use various slush funds for electioneering, then it'd be a bit easier.

But as things stand in Nigeria, political survival is about money.

i'm just hoping the money is properly invested and ends up improving the economy significantly enough to repay our debt.
is that possible?

Jenifa_:

i'm just hoping the money is properly invested and ends up improving the economy significantly enough to repay our debt.
is that possible?

Heving debt isn't a bad thing, especially if you are able to get it at low interest rates like Lagos. I understand that this idea of being "debt free" is attractive, but it isn't really optimal, imo.

ekt_bear:

I don't see how the "cost of hiring consultants" will be realistically reduced. There are just certain political realities we have to deal with. If the FG was weak and were less able to use various slush funds for electioneering, then it'd be a bit easier.
But as things stand in Nigeria, political survival is about money.

My point is, in freeing money from recurrent expenditure, you have more for infrastructural development. It is important to reduce cost of governance. It is only in this country that recurrent expenditure is higher than provisons for capital development. In Lagos State, capital expenditure is just marginally higher than the latter.

BRF needs to urgently address the leakages in the system and going further, he should stop pretending that he is the only functional member of the State Executive Council.

stormm:

My point is, in freeing money from recurrent expenditure, you have more for infrastructural development. It is important to reduce cost of governance.

Right. But this is obvious to everyone. The point is that some of it (e.g., the "consulting" fees mentioned) likely will never be reduced, unless Nigeria dramatically changes in a way such that money is less necessary in politics. It is nice in theory for one to hope that all excesses are cut off. But practically speaking, in Nigeria that is like going to a gunfight with a knife.

It is only in this country that recurrent expenditure is higher than provisons for capital development. In Lagos State, capital expenditure is just marginally higher than the latter.

Can you provide references for either of these statements?

BRF needs to urgently address the leakages in the system and going further,

Agreed, he should try his best. But there is only so much that can be done, realistically.

he should stop pretending that he is the only functional member of the State Executive Council.

Heh. At this point, it isn't him tooting his own horn so much as the world at large. It is what it is.