Lagos Domestic Debt Worrisome – LP

The Labour Party (LP) in Lagos State has said that the N807.21 billion domestic debt of the state is “quite worrisome”.

The state Chairman of LP, Dayo Ekong, said this on Tuesday, while speaking with THE WHISTLER.

According to data released by the Debt Management Office last week, Lagos domestic debt stood at N807,208,634,237.88, in the domestic debt for the 36 states of the Federation and the Federal Capital Territory as at December 31, 2022.

This represents 15.12 percent of the total domestic debt owed by the 36 states and the FCT.

“I don’t think there’s any reason for them to put people in such a debt. And this is quite worrisome,” Ekong told THE WHISTLER.

She criticized the administration of Governor Babajide Sanwo-Olu, saying she is yet to see what the government is doing with all the money it has borrowed.

Ekong said: “I don’t know what they’re doing with all this money. The Blue (Line) rail is not really functioning the way we thought it would. And even right now, is not as if it’s generating income. But in terms of the correlation of the debt and income coming in, there’s no reason why they should borrow that much, honestly.”

According to her, Lagos is making about N60 billion in tax returns, adding that with its internally generated revenue, the state does not have to borrow.

Ekong averred that LP in the state is not happy with Lagos debt profile, noting that the party will henceforth hold the All Progressives Congress- led government of Sanwo-Olu to account.

“The internally generated taxes is enough to service Lagos if it’s well managed,” the LP Chairman said.

“But the problem we’ve is that the state is not held accountable to explain what they do with our money. And this’s why Labour Party is not happy and we’re frowning at it. And we’re going to hold this government responsible for everything they do, henceforth,” she noted.

Ekong, however, said that there is nothing wrong with borrowing, but lamented that the infrastructure the state government is presumably funding with the borrowed money cannot pay the debt.

“It’s sad. This’s extremely high,” she said. It’s sad that they had made such a debt at this time.”

“When you borrow money, there’s no problem borrowing money. But the money that has no economic value, that’s not bringing any return,… and the infrastructure they’re building cannot pay back the debt, there’s no reason to borrow.”

“If you’re borrowing money and what you’ve on ground can translate into generating income to service that debt, then it would be justified,” she added.

THE WHISTLER in December 2022 reported that the gubernatorial candidate of the Peoples Democratic Party (PDP), Olajide Adediran, had accused Sanwo-Olu’s administration of borrowing N79.7 billion between July and September 2022.

Adediran had said that this increases the state debt profile from N797 billion as at June 2022 to N877 billion.

He also accused the governor of mortgaging the future of the state by continuously increasing domestic and foreign debt under the pretense of building infrastructure in the state.

According to data from DMO, as at June 30, 2022, the state domestic and foreign debt stood at N797. 304 billion out of N5. 281 trillion owed by state governments in the country and the FCT, representing about 16 percent of the debts owed by state governments.