The Lagos State Commissioner for Budget and Economic Planning, Samuel Egube, has maintained that borrowing is good if it is used to sustain a revenue profile,
The Commissioner also noted that the state government has used its debt to conclude some projects.
Egube made the comment when he appeared as a guest on a Channels Television programme, Sunrise Daily, on Monday, November 28, 2022, he said that debt is not a problem in itself but rather the way it is structured.
Reason for clarification: Egube’s comment is coming against the backdrop of concerns by some interest groups over the debt profile of Lagos state, which has topped the list of highly indebted states in the country.
Lagos State owes N797.304 billion out of the N5.281 trillion owed by the sub-nationals, as of June 30, 2022, according to data from the Debt Management Office (DMO).
Egube pointed out that the Lagos State Government moderates the way it borrows, adding that the sum of N30 billion has been 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 procure capital expenditure, adding that the government will continue to borrow at reasonable levels. He said:
- “Debt is not a problem in itself, it’s the way the debt is structured. Borrowing is good if it is used to sustain a revenue profile. Lagos state has used its debts to conclude some projects. We are working within our sustainability limits, debts are used to service and procure capital expenditure, we have a stronghold on the sustainability framework, and we will continue to borrow at reasonable levels.
- ‘’The Lagos state development plan is based on private sector participation, there is a lot of moderation when it comes to borrowing for this year is less than last year. N30 billion is proposed to be borrowed for 2023. The Lagos state development plan’s primary target is to galvanize the people on the efforts towards making Lagos Africa’s model mega city that is safe, secure, functional, and productive.”
Lagos State development: Speaking further, Egube said that the state government’s development plan is centred around a thriving economy, adequate jobs, education, healthcare and modern infrastructure with the government targeting to increase its revenue base to 5% from 1.9% as its contribution to Gross Domestic Product (GDP).
- “The plan has over 400 initiatives organized around a thriving economy, adequate jobs, education, and healthcare services, as well as modern/sufficient infrastructure, and driving effective governance Lagos state government is working towards taking its revenue base from 1.9% to 5% as its contribution to GDP.
- “What is being done to end poverty based on the poverty report from the NBS? Education; LASG is expanding educational facility access, and employing qualified teachers (in 2020, the pass rate was 29%, and in 2021 it was 80%). In healthcare, LASG is working towards better healthcare infrastructure, and hiring qualified healthcare personnel.
- ‘’In terms of infrastructure; LASG is developing the Lekki deep sea port, roads, and rail. All these will improve the people’s productivity, when the people are more productive, poverty in Lagos state will reduce drastically.”