Akinwunmi Ambode, Governor of Lagos State, has said his administration did not solicit or take foreign loans during his tenure as the head of Nigeria’s commercial capital.
Governor Ambode, whose tenure ends on May 29, disclosed this in an interview recently.
According to him, the $1.43 billion debt accrued by Lagos State was as a result of the accumulation of foreign loans collected by previous governments in the state, adding that the arrears increased due to the difference of the exchange rate.
He noted that the servicing of the debt had taken a toll on the Internally Generated Revenue (IGR) of the state, but that the prudent financial system he introduced helped to mitigate the impact and allowed his administration to provide infrastructure to Lagosians.
“Talking about Lagos state having the highest amount in terms of foreign loans, truth is that I have it on record that in my four years, I never took any foreign loan,” Governor Ambode told ThisDay.
“So, whatever it is that they are saying about having $1.43 billion is an accumulation of loans that have been taken by successive governments.
“Remember also, these facilities that we call loans were taken at an exchange rate that was lower than N150. But again, this government that has not taken any of these facilities would pay back and has been paying back in the last four years on the new exchange rate which is like N360 because government is a continuum.
“That has immense pressure on the internally generated revenue. And when you have this pressure on the IGR that you are using to service these facilities without complaining, it means that you have been financially prudent to be able to use the remaining resources to do what you have outside there in terms of infrastructure development.
“That is the way to explain what has been happening and the value that comes with the infrastructure that we are giving.
“It is like double the price of what we are putting inside when you match the issues about loans and resources. Remember also that the country was going into recession when we came in.”
Governor Ambode also stated that the state’s IGR has risen from about N12 billion to N30,000, attributing the rise to “improvement in collection machinery.”
He said: “Fortunately for Lagos, you have statistics that favour revenue growth. Lagos is the commercial capital of Nigeria; the business community in terms of population or location is here and this is like 70 percent of what is happening in Nigeria..
“Remember also when we came in, the revenue that was generated on a monthly basis was about N12 billion and then it moved to almost like N20 billion.
“Today, we are having an average of N30 billion to N35 billion a month but it is not as if the expansion is based on increase in rates or taxes.
“What has been done is just improvement in collection machinery and then expanding the tax net and the ability to put people together and run an efficient civil service system that was able to tap into those things; and then more importantly, investing in technology to be able to carry out some of these collections.
“Yes, revenue has improved tremendously but obviously it is based on focus, and it is based on the ability to match those needs in terms of development and economic growth with how to fund it.
“Lagos is also favoured by the fact that because of the dynamics that we have, we are likely to be more attractive to the capital market and also more attractive to commercial banks and the ability to pay back would always give you more resources to be able to get funding for most of these projects that we have done.”