By Olasunkanmi Akoni & Monsuru Olowoopejo
LAGOS—THE Lagos State Government, yesterday, said it had paid the total sum of N141.59 billion to bond holders in its various fixed rate bond programmes.
This came as it said limited resources and challenging economic climate compelled it to explore the options of other financial sources from the capital market through a series of bond issuance programmes to support the government’s developmental agenda
According to the government, the bonds included the Lagos State N80 billion fixed rate programme two, series one floated in 2012 with a maturity date of 2013; N87.5 billion fixed rate programme two, series two floated in 2013 with a maturity date of 2020 and N47 billion fixed rate programme three, series two floated in 2016 with a maturity date of 2023.
The figures were revealed at the 5th Annual General Meeting, AGM, between the state government and bond holders at the Civic Centre, Victoria Island.
Following the analysis of the bond by the government, in the N80 billion fixed rate programme 2, Series 1 bond, the state government as at September 2017 had paid N76.17 billion to bond holders out of the N97.43 billion it contributed to the bond, leaving a balance of N30.34 billion invested in fixed income and treasury bills.
In the N87.5 billion fixed rate programme 2, Series 2 bond, the sum of N61.44 billion was paid to bond holders out of the N75.91 billion contributed by government, leaving a balance of N18.49 billion invested in fixed income and treasury bills.
In the N47 billion fixed rate programme 3, Series 1 bond floated last year, the sum of N3.9 billion had been paid to bond holders out of the N4.2 billion contributed by the government as at September 2017, leaving a balance of N229.7 million which had been invested in fixed income and treasury bills.
Addressing participants at the AGM, the Commissioner for Finance, Akinyemi Ashade, noted that the various bonds had been used to upscale infrastructural development in the state in the areas of roads and bridges construction, water, transportation, health and waterfront infrastructural development.
According to him, $50 billion was needed to address infrastructural deficits in the state, which he said, was part of the reasons the government floated bonds to bridge the gap, adding that over time, two bridges had been constructed with the proceeds from the bonds while major infrastructure were upgraded across the metropolis.
Ashade said the state government was committed to uplifting its debt ratings and would borrow at reduced rate, saying that in the coming year, government was going to invest massively in projects.
The commissioner said the state government was looking for ways to increase its revenue and that part of the move was to review existing rate systems which had been in use since the 80s with ridiculous rate.
“We will update our laws to increase revenue. Those revenue laws have been in existence since the 1980s and they have ridiculous rates,” he said, while calling on all to support the government by paying their taxes appropriately.