www.thenewsnd.com

By Kazeem Ugbodaga

The Lagos State government this morning denied owing N100 billion, saying it owes N15 billion. The state government was reacting to reports in some newspapers (not P.M.News) that it is leaving behind a debt portfolio of N100 billion to be inherited by the incoming administration of Babatunde Fashola. “The Lagos State Government will like to state categorically that this administration has not gone into any foreign loan transaction to date.

“The only long term loan incurred by this administration is a domestic loan of N15 billion bond approved by the Securities and Exchange Commission (SEC) and drawn down in October 2002,” said the Commissioner for Finance, Mr. Akin Doherty.

Doherty, in a statement, said: “the N100 billion is a miscalculation and misrepresentation of the current and true loan portfolio of the state. No where in the press briefing was the total sum of current debt burden of the state summarised and so reported.

“The Multilateral and Paris Club loans are loans inherited from past administrations, which may have been misrepresented as current loan liabilities.”

According to Doherty, these loans were obtained for the Lagos State Water Corporation, solid water, drainage and health system projects, among others.

He said the Paris Club loans had been fully liquidated with excess crude proceeds, while a substantial refund was due to the state government from the federal authorities.

On the N15 billion, the commissioner stated that the bond was backed by an Irrevocable Standing Payment Order (ISPO) and was being managed by Union Trustees through the establishment of a sinking fund.

“Today, sufficient amount has been provided in the sinking fund to take care of both principal and interest at maturity.

“This bond was raised in order to utilise long term funds for long term projects and correct the mismatch of the past when short term funds were used for long term projects,” he added.

Doherty also said the refund on the independent power plant deductions, balances of the state government share of the excess crude utilised in paying down the Paris Club loan and the N14 billion council funds were erroneously reported as if the money were in the bank.

“It is indeed true that this monies are due to the state government and will be subsequently available for the incoming administration if court orders are obeyed by the Federal Government,” he said.