Lagos State Economic Planning and Budget Commissioner Samuel Egube has argued that loans are good if they are used to maintain an income profile.
The Commissioner also pointed out that the state government has used its debt to complete some projects.
Egube made the comment when appearing as a guest on a Channels Television show, Sunrise Daily, on Monday, November 28, 2022, saying that debt is not a problem in itself but the way it is structured.
Reason for clarification: Egube’s comment comes against the backdrop of concerns from some interest groups about the debt profile of Lagos state, which tops the list of highly indebted states in the country.
Lagos State owes N797.304 billion of the N5.281 trillion owed by subnationals, as of June 30, 2022, according to data from the Debt Management Office (DMO).
Egube noted that the Lagos state government is moderating the way it borrows, adding that the sum of N30 billion is projected to be borrowed in 2023.
More loans for Lagos: The commissioner noted that the state government is working within its sustainable limits, as the debts are used to service and purchase capital expenditures, adding that the government will continue to borrow at reasonable levels. He said:
- “Debt is not a problem in and of itself, it is the way debt is structured. The loans are good if they are used to maintain an income profile. Lagos state has used its debts to complete some projects. We are working within our sustainability limits, debt is used to service and purchase capital expenditures, we have a stronghold on the sustainability framework and will continue to borrow at reasonable levels.
- ”The Lagos state development plan is based on private sector participation, there is a lot of restraint when it comes to lending for this year it is less than last year. It is proposed to borrow N30 billion by 2023. The main objective of the Lagos State development plan is to empower people in efforts to make the model megacity of Lagos Africa safe, functional and productive.”
Development of Lagos State: Speaking further, Egube said that the state government’s development plan focuses on a prosperous economy, proper jobs, education, healthcare and modern infrastructure with the government’s goal of increasing its revenue base from 1.9% to 5%. as its contribution to the Gross Domestic Product (GDP).
- “The plan has more than 400 initiatives organized around a prosperous economy, adequate jobs, education and health services, as well as modern/sufficient infrastructure, and promoting effective governance. The Lagos State government is working to bring its revenue base from 1.9% to 5% as its contribution to GDP.
- “What is being done to end poverty according to the NBS poverty report? Education; LASG is expanding access to educational facilities and employing qualified teachers (in 2020 the pass rate was 29% and in 2021 it was 80%). In healthcare, LASG is working to improve healthcare infrastructure and hire qualified healthcare personnel.
- ”In terms of infrastructure; LASG is developing the Lekki deep-water port, highways and railway. All this will improve people’s productivity, when people are more productive, poverty in Lagos State will be drastically reduced”.
