Lagos finances in robust state, says commissioner
The finances of Lagos State are in robust state and there is nothing to worry about debts owed by the government either externally or internally, Ayo Gbeleyi, the state commissioner for finance, has said.
Gbeleyi made the declaration at the 2014 annual retreat for accountants in the employ of the state government which held in Lagos.
He said the state government has been meticulous and responsible in deploying funds for live-changing infrastructure and remains within internationally acceptable benchmarks in its borrowing when compared with its capacity and the size of the Lagos economy.
According to the commissioner, the state has demonstrated a high level of fiscal prudence in its aggressive drive for infrastructure renewal and development.
He said, “In funding the huge capital expenditure spending (which averaged N235 billion annually over the last five years), we have had to augment our net recurrent surplus (excess of ordinary revenue over recurrent expenditure) with some borrowings to keep up with the pace of developmental needs to bridge the gap in those critical areas of infrastructure, and social amenities.
“This is further made more imperative in our collective strive towards realising the administration’s vision of making Lagos Africa’s model mega city that is safe, secure, productive and functional, leveraging its policy thrust of poverty eradication and economic growth through infrastructure renewal and development.”
Gbeleyi justifying the borrowings, listed projects such as the modernisation and upgrade of the 60km Lagos-Badagry Expressway from 4 lanes to 10, 27km blue line rail system 70m gallons p/d Adiyan 2 water scheme, 25 million gallons Odomola water scheme, 16,500 hectares Lekki Free Trade Zone development, Lekki Epe international airport, Lekki deep sea port, smart city/regional economic & innovation hub, film village, various arterial & inner city roads, preventive healthcare schemes, enhanced nutrition and agricultural schemes, education project, citizens empowerment schemes, among others.
He said, “In doing this, we have not only been meticulous and exceedingly responsible in the approach, we have also been adhering to internationally acceptable thresholds in our debt sustainability position in all key parameters, using both the fiscal responsibility Act, the guidelines of FGN-DMO as well as the Country Policy & Institutional Assessment (CPIA) benchmarks of the World Bank for developing economies. In the five-year period (2009 – 2013), debt service capacity as measured by debt service to total revenue averaged 14% compared to the 30% prescribed by the World Bank CPIA benchmark. Lagos also ranked well in terms of debt sustainability as measured by total debt to GDP and total debt to total revenue ratios at 2.44% and 80% compared to the World Bank CPIA benchmark ratios of 20% and 250%, respectively.”
He, however, charged the accountants to remain transparent and continue to play an instrumental role in the management of state’s funds and sharpen their knowledge and skills in providing proactive and sustainable financial solutions towards the attainment of the goal of further improving on the living standards of the people.