The Lagos State Government said it inherited a debt of N430 billion from the administration of Babatunde Raji Fashola.
The debt legacy was revealed today as the state announced plans to float a new bond of N43 billion in the Capital Market this year as part of move to finance its budget deficit.
Commissioner for Finance, Mustapha Akinkunmi however said the debt was not a big burden for the state as the government has set money aside to liquidate a fraction of it.
This year, the government is paying about N78 billion to the creditors.
He said the debt profile of the state is sustainable according to international rating, adding that adequate plans have been put in place to pay back the state’s debt which is a long term debt.
The state government is borrowing N119.7 billion to finance its budget deficit for this year. Out of the N662.588 billion budget for this year, the total revenue is put at N542.873 billion while the balance of N119.715 billion to be funded through borrowing.
Akinkunmi, who spoke in Ikeja, Lagos, Southwest Nigeria while answering questions on how government would finance the deficit said very soon, the N43 billion bond would be floated to raise money to fund the deficit.
He said payment for the bond is going to be on long term basis, adding that the government had earmarked N12 billion to service part of the N119.7 billion to be borrowed to service the budget.
Also, Commissioner for Economic Planning and Budget, Akinyemi Ahade disclosed that to raise the N622.588 billion budget for this year, the Lagos Inland Revenue Service, LIRS, had been given the marching order to generate N300 billion, which is equivalent to 78 percent of the total Internally Generated Revenue, IGR.
“We do not intend to introduce new taxes in 2016 but rather bring more citizens into the tax net, especially the large informal sector and also through the adoption of an automated process to block leakages,” he said.
Ashade also disclosed that the Lagos State House of Assembly has a capital expenditure of N3.8 billion in the budget to execute constituency projects.
*Published by: TheNEWS