The plan of the Lagos State government to secure a $600 million facility from the World Bank is allegedly being impeded by the Federal Government, much to the frustration of the governor and other high-ranking officers at the seat of power in Alausa, Ikeja.
Members of the state House of Assembly are known to maintain silence and secrecy over the debt profile of the state, yet it is believed that Lagos is one of the highest debtor-states in the country.
Only recently, Governor Babatunde Fashola signed an N80bn bond after his government was unable to access a loan facility from the World Bank.
“The governor and the entire EXCO have been thrown into confusion with the action of the Federal Government,” a senior aide of the governor told Huhuonline.com, adding that the Federal Government was playing politics with the action.
But the aid was soon to contradict himself when he recalled that the Federal Government, through Minister of Finance and Coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala, had recently warned state governors to slow down on the practice of rushing to borrow at every opportunity, which was fast becoming de rigueur. He thought that this could be the reason for the action against the state.
“Fashola heavily relied on the money to partly fund the 2013 budget and he was already making the moves to ease the borrowing before this unfortunate incident,” he said.
“The state is seriously financially challenged and we are supposed to do everything possible to make money available for development. But with the Federal Government action, I can assure you that we would be stranded financially next year.”
When reminded that the state is believed to be the most financially viable in the country and that AphaBeta company, owned by Tinubu, is doing its job of collecting internally generated revenue, the aide, who had already insisted he would only speak anonymously, retorted: “How has that company helped? None of us can tell you exactly how much the AlphaBeta generates for the government monthly but the company makes huge money. It is what it declares as the generated revenue for the month that we work with.”
Governor Fashola and some of his aides were at the National Assembly on Tuesday to express their displeasure with the action of the Federal Government.
In a petition to the House Committee Representatives Committee on Loans, Aids and Debts, Fashola explained that the loan had been factored into the 2013 budget as a running loan procured on the understanding that the state would access $200m in three tranches over a period of three years, spanning 2012 to 2014, and it is, therefore, improper for the Federal Government to stop it. He lamented that only the first tranche of the loan had been procured so far.
Fashola, who personally visited the National Assembly with his delegates and some members of the House under the platform of the Action Congress of Nigeria (ACN), disclosed that the state had a commitment with the World Bank for a loan of $600m.
“It is supposed to be in three tranches and the first tranche was paid in 2011. We were expecting the payment of the second tranche when we got the shocking information that the loan facility had been stopped. As I speak, we have not received any official communication from the Federal Ministry of Finance about their concerns.
He added that he had spoken on phone with the minister of finance, who said she could not accommodate Lagos State in the 2013 borrowing plan, lamenting that his plea is for the second tranche to be included in the 2013 borrowing plan and the third included in the 2014 borrowing plans.
