Indeed, the State said as at 2019 end, its debt sustainability level was 29 per cent, and would drop further to 25 per cent in the near term, to enhance its revenue drive.
The explanation comes against the backdrop of concerns over the increasing level of borrowing locally and offshore by the Federal and state governments, which the Debt Management Office (DMO), put at over N25.701trillion as at the first half (H1) of 2019, with states accounting for 15.43 per cent of the total.
In particular, Lagos was cited as the first among the top five debtor states in the country, with total public debt put at N992.38billion during H1 2019.
Besides, in a breakdown of its N1.16trillion 2020 Budget in Lagos, Tuesday, the State Commissioner for Economic Planning and Budget, Sam Egube, hinted of a deficit in excess of N97.53billion, which he said “will be financed by a combination of external and internal loans well within our fiscal sustainability benchmarks.”
To underscore its debt sustainability level, the State Commissioner for Finance, Dr. Rabiu Onaolapo, while admitting that debt issues remain controversial, however, insisted there is no cause for concern when looked at from the point of view of utilisation and sustainability.
He explained: “For debt utilisation and in line with the Fiscal Responsibility Act, 100 per cent of our debts are targeted towards capital projects, and if you look at it from a debt sustainability figure, we are also very much in line with local and international benchmarks.
“Currently, we finished 2019 at 29 per cent, which is below the 30 per cent benchmark. Going forward to the medium term, by 2021/2022, our debt sustainability figures will come down further to 25 per cent, meaning that we will be able to manage our debts further into the future, thereby increasing revenue in the coming years.
“For our debt charges, our external debt charges stand at N4.9billion and our internal debt charges stands at 29.7billion, while charges on Bond is N5billion making a total of N39.692billion.”
Broken further, Onaolapo said in terms of deficit financing put at over N97.53billion in the budget, external loan constitutes N34.5billion, and internal N63billion, even as it anticipates total revenue of about N1.071trillion.
Against this backdrop, Egube reiterated that as Nigeria’s economic hub, and one of the fastest growing economies in Africa, the Lagos State Government is investing more on capital projects (N711.033billion) or 61 per cent of its 2020 budget.
In addition, the Budget Commissioner said the state is also doing a lot to enhance the ease of doing business by digitalising its activities – “e-governance system, eC-of-Os, and electronic physical planning approval system are all designed to aid commerce.”
As a result, he said the state is fast-tracking its activities as much as possible, “to avoid delays in project execution and release of funds.” This is to enable the state achieve budget targets, which include: attracting private sector investments by creating an enabling environment; aggressively develop, upgrade and maintain our Infrastructure; and investing in human capital development, especially education and healthcare.
Others are to facilitate sustainable social investment and enterprise; improve capacity to collect due revenues as efficiently as possible; improve civic engagements and participation in governance, leveraging technology; build impactful partnerships with the Federal Government, other States and Local governments, development partners and civil society; and improve the quality of the environment and public spaces generally.
