Lagos State Governor, Mr. Akinwunmi Ambode, has explained the modalities for usage of the N500 billion bond, which the State House of Assembly approved on days ago for issuance.
Contrary to the misrepresentation of the bond programme, the governor said it was a pool of fund objectively structured for a period of time and not just for the 2016 fiscal year.
He explained in a statement that it was imperative “to clarify the programme because it has been technically misrepresented.”
Since 2007, the governor noted, the state has had two bond issuance programmes, adding that the latest was the third and would run for a period of three to five years.
Under the current fiscal regime, Ambode disclosed, the state “can only draw N60 billion from the pool of N500 billion. The state will draw from the fund for subsequent years as approved by the Assembly.
“Before you can actually even appropriate it in your budget, you need the programme. And the programme was what was approved by the Assembly. But in the 2016 fiscal year, what is in the appropriation law is just N60 billion. So, it is from this programme that we are pulling out N60 billion.
“For the next fiscal year, if the assembly approves for instance N80 billion as bond, we do not need to go back to the assembly again after they have approved that budget, you draw from that issuance programme and take another amount which is approved for 2017 budget.
“If they approve any amount for 2018 budget, for instance, you take from the pool of N500billion, which can take the next five to ten years. So, it is just a lump sum which you now draw down based on the authorization by the House. That is the technical explanation.
“It is not as if the state wanted to go and take another N500 billion. It is just a requirement by Securities and Exchange Commission (SEC) so that you follow the procedure on a yearly basis.”