By Dipo Olowookere
Governor Akinwunmi Ambode of Lagos State has explained why the state government sought the approval of the state House of Assembly to obtain a N500 billion bond.
Mr Ambode, speaking with newsmen on Wednesday, said the bond was a pool fund that would span over a period of time and not just for the current appropriation year.
He said only N60 billion would be accessible in 2016.
Explaining the modalities of the bond programme, which was ratified by the Assembly this week, Mr Ambode said the State, since 2007, has had two Bond Issuance Programmes, adding that the one recently approved by the Assembly was the third and would run for a period of three to five years.
The Governor said the State would draw from the fund for subsequent years as approved by the House.
“Before you can actually even appropriate it in your budget, you need that programme and that programme was what was approved by the Assembly.
“But in the appropriation of 2016, what is in the appropriation law for 2016 is just N60 billion. So, it’s from this programme that we are pulling out this N60 billion.
“So, for next year’s budget, if the House approves for instance N80 billion as bond, we don’t need to go back to the House again after they have approved that budget, you draw from that issuance programme and take another amount which is approved for 2017 budget.
“If they approve any amount for 2018 budget, you take from that pool of N500 billion, which can take the next five to 10 years.
“So it’s just a lump sum which you now draw down based on the authorization by the House. That is the technical explanation. It’s not as if the State wants to go and take another N500billion, it’s just a requirement by Securities and Exchange Commission (SEC) so that you follow the procedure on a yearly basis,” Mr Ambode explained.
The Governor also assured that the N60 billion Bond Programme approved for the current year would be used to accelerate the aggressive infrastructural development ongoing in the State.
He said the funds would be channelled towards the completion of the Ajah Flyover, Abule Egba Flyover, Pen Cinema Flyover, as well as the construction of more lay-bys, bus parks, improve health facilities and the building of more public schools among many other infrastructural projects.
He said that the financial arrangement of the State is such that Bond Programmes embarked upon are easily repayable through Internally Generated Revenue (IGR), adding, “all we are just doing is to accelerate development for the future prosperity of Lagos.”
Governor Ambode also thanked members of the House of Assembly for approving the bond, saying that their actions have also shown their passion and commitment to see the State make appreciable progress.
It would be recalled that the Lagos State House of Assembly on Tuesday approved the sum of N500 billion worth of bond for the State Government spanning between 2016 and 2019, which according to them was necessary for the development of the state and would be repaid through the State’s IGR.