It has been said that you are leaving behind about N418bn debt and one wonders what is responsible for the huge debt profile despite the huge revenue generated by the Lagos State Government.
I have answered this question many times and it seems people just dwell on debt but in the context of debt, let us look at the assets too. I am leaving behind hundreds of kilometres of roads, bridges, schools, hospitals, courtrooms, social services, skill centres, streetlights and traffic lights. I am leaving behind also people who now have jobs, who did not have jobs seven years ago. I am leaving behind a stronger security force; a stronger LASTMA, a stronger KAI. That is where the money went. I am leaving behind a rail system. I am leaving behind so many assets for the continuity of life. I am also leaving behind a bigger workforce – a better equipped workforce.
I think we should talk less about debt and more about development.
Lagos State Government still has to continue to raise more money and this takes me to the Internally Generated Revenue that you are talking about. The IGR – standing on its own – is averagely N20 billion. Let us do the math. Some months it is more than that, some months it drops. The monthly allocation from the Federation Account is averagely N10 billion; sometimes it goes up to N11 billion, sometimes it drops to N9 billion. Let us use an average of N10 billion, even though in the last few months it dropped to six and half (N6.5 billion). If we have averagely N30 billion, do the math, divide it by 21 million people. You will get one thousand four hundred and something naira per person in Lagos. It is easy then to say let us collect the IGR you think is big but you are seeing the IGR alone and not seeing the responsibilities.
Our population has also grown by forced migration in terms of the Internally Displaced Persons across Nigeria. I just sent a team to somewhere in Apapa where there are people displaced from the North-East of Nigeria in camps. We have to go and intervene; we cannot leave them there without help. The sanitary condition there is horrendous. If we want a government that only deals with what is available, then every month is the government going to tell everybody, ‘go and take your N1,400; go and build your roads, go and build your schools, go and build your hospitals, manage your security?’
But we have to be futuristic, we have to think ahead. The IGR that you also talked about does not come as N20 billion to us. It comes when somebody pays N1 million for land today, somebody pays for his vehicle registration tomorrow, and somebody pays his ground (land) rent. It is because we are accountable that we always announce at the end of the month, ‘this is what we got.’ If we wait for 30 days for the money to accrue, it means we won’t do any work.
People should understand that we won’t do any work because the money has not accrued. What do we do? We borrow against it. The banks which we collect it from know that we will pay because the money (IGR) comes through them.
So, we take a LOAN. But we don’t borrow to pay salaries; we don’t borrow for recurrent expenditure, we borrow for capital investments. I cannot go and tell the person who is waiting to take his child to the hospital and there is no hospital space; that they should ‘wait, I am waiting to collect money.’ If I give you the contract to build a hospital, I cannot tell you ‘take one naira today, I am waiting for two naira tomorrow.’ It is not a way to plan construction. You must gather your building materials and you must move men to the site. We borrow from the banks. When the monies come, the banks deduct them.
The borrowing you are even talking about, measure it against the assets. We took N275bn bond over eight years. The first thing we had to do was to repay the old bond of N15 billion because the Lagos State Government drew N15 billion out of the N25 billion bond. We had to repay that so that we could take the full benefit of what we were planning to do, which was going to be issued in series. And we did all these in public. What did we use these monies to finance? We used them to finance infrastructure. As the monthly IGR is coming, we are returning 15 per cent of the IGR into a CONSOLIDATED debt service account. We can’t touch it. Take out 15 per cent of N20bn. We have over a N100 billion in that account to pay the debts. Those who are saying we owe, the system for paying bond is secured. We just paid the second bond, which was the first that I took. We paid it last year. The next bond will be due in 2017 and it is about N60 billion or N70 billion but we have N100 billion in the account. In any event, we have over-secured our liabilities as far as the bonds are concerned. As far as the local short-term LOANS from banks are concerned, we were able to pay.
If we don’t want a life of debt, then Lagosians must agree that we reduce our budget to what we earn. We have a budget of about N489 billion. Let us use our IGR as an example: N30 billion multiplied by 12 months is N360 billion. We are already in a hole of about N119bn. If Lagosians want us to reduce it, then will Lagosians agree to stop demanding more services? Certainly, no! Thus, this is the context.
And when you look at the countries we aspire to be like: America owes $16 trillion – they owe the whole world – but they have the best space ships, aircraft and army, and they can decide what our military does with the debt they owe the world.