Governor Babajide Sanwo-Olu has signed necessary documents with the Security and Exchange Commission, SEC to raise over N137 billion from the capital market. The new bond issuance has thus raised the capital market debt to close to N400 billion within the three years of the administration, and is part of the N500 billion the state’s helmsman said was required to finance key infrastructure in the Aquatic state under its Debt Issuance Programme.
Not long after he came to office in 2019, Governor Sanwo-olu had hinted that his government will raise N500 billion bonds to execute important projects in the state. The state government got the approval of the state House of Assembly to issue the bonds.
The repayment plan for the N500 billion bond is for 10 years, while the current issuance, the third in the series is offered at 13 per cent fixed interest rate, according to explanation by the government.
Speaking after signing the documents on Monday, Governor Sanwo-Olu said the funds raised from the bonds will be used to bridge infrastructure gap, boost the state’s economy and improve the lives of the people of the state.
Key projects to benefit from the funds, the governor said include the 10-km Regional Road in Eti Osa, six-lane Lekki-Epe Expressway, Ijeododo Road in Alimosho and Oba Sekumade Road in Ikorodu, among others.
According to him, “Lagos once again marks another milestone in the domestic debt capital markets, with the issuance of the largest bond ever by a sub-national Government in Nigeria.
“The signing ceremony finalises the issuance of N137.3 billion bond at 13 per cent fixed rate in our Series IV Bond Issuance under the N500 Billion Fourth Debt Issuance Programme.
“We set out to raise up to N125 billion, but we closed the book with bids totalling N137.3 billion. This is a strong response from the investing community to our administration’s debut bond issuance.
“This humbling achievement is a testament to continued investors’ confidence in the State’s ability to deliver on its infrastructural and socio-economic developmental objectives, and also to meet repayment obligations.
“In line with our vision to build a Greater Lagos, proceeds from this bond will be used to finance infrastructure projects, primarily in roads, environment and healthcare. These projects include 10-km Regional Road in Eti Osa, six-lane Lekki-Epe Expressway, Ijeododo Road in Alimosho and Oba Sekumade Road in Ikorodu.
“These will contribute to a better quality of living for our people, while also creating a more enabling environment for commercial and economic activity,” Sanwo-olu said.
The Governor said the state decided to issue the bond based on the advice of ley stakeholders in the state, noting that proceeds from the bond will drive his administration THEME agenda.
Lagos state is the most indebted state in the country. It leads other 35 states in the country in terms of domestic debt totaling over N500 billion as at the end of 2021. The state is closely followed by Rivers with N377 billion, while Akwa Ibom has N232 billion; Delta is next on the debtors’ list with N213 billion.
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