The N500 billion bond approved by the Lagos State House of Assembly was a pool fund that will span over a period of time and not just for the 2016 appropriation year alone, Governor Akinwunmi Ambode has said.
Ambode, who spoke to reporters yesterday, said it was relevant to clarify the bond programme because the approval had been technically misrepresented in some section of the media.
The governor said, since 2007, the state has had two bond issuance programme, adding that the one approved by the assembly during the week was the third. He said it would run for between three to five years.
Ambode added that for the present appropriation year, his administration can only draw N60 billion from the pool of N500 billion.
He said the government would draw from the fund for subsequent years as approved by the House.
The governor said: “Before you can actually even appropriate it in your budget, you need that programme and that was what was approved by the House.
“But what is in the Appropriation Law for 2016 is just N60 billion. So, it’s from this programme that we are pulling out this N60 billion.
“So, for next year’s budget, if the House approves for instance N80 billion as bond, we don’t need to go back to the House 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, you take from that pool of N500 billion, which can take the next five to 10 years. So it’s just a lump sum which you now draw down based on the authorisation by the House. That is the technical explanation.
“It’s not as if the state wants to go and take another N500 billion; it’s just a requirement by Securities and Exchange Commission (SEC) so that you follow the procedure on a yearly basis.”
The governor assured that the N60 billion bond programme approved for the year would be used to accelerate aggressive infrastructural growth.
He said the funds would be channeled towards the completion of the Ajah Flyover, Abule Egba Flyover, Pen Cinema Flyover, as well as the construction of more lay-bys, bus parks, improve health facilities and the building of more public schools among many other infrastructural projects.
He said the financial arrangement is such that bond programmes embarked upon are easily repayable through Internally Generated Revenue (IGR), adding: “All we are just doing is to accelerate development for the future prosperity of Lagos.”
Ambode hailed members of the House of Assembly for approving the bond, saying that their actions have shown their passion and commitment to see the State make appreciable progress.