The Governorship candidate of the ADC in the March 18 gubernatorial election in Lagos State, Funso Doherty, has expressed worry over the rising debt profile of the State.
Doherty shared his concerns in an open letter to Governor Babajide Sanwo-Olu against the backdrop of the State’s commencement of implementation of its N1 trillion bond issuance programme, by offering the first tranche of N100 billion in fixed-rate debt.
According to him, the situation becomes more worrisome because the State Government is borrowing more even as its tax revenue increases. He pointed out that under the APC, Lagos State’s outstanding debt rose from approximately N235 billion in 2011 to N1.2 trillion in 2021.
While noting that this came as the highest amount owed by any state in Nigeria, he said Lagos debt was almost 4 times the amount owed by the next highest state (Kaduna) and more than the total owed by the next 4 states combined (Kaduna, Rivers, Ogun, and Cross River) in 2021.
READ ALSO: Lagos most affected as states surrender N78bn to service external debt
Doherty in the letter dated May 19, 2023, and addressed to the State Governor said:
“Lagos continues to borrow substantially despite rapid growth in Tax Revenues Assessed by traditional measures that compare the existing level of debts and repayments owed by the State with the Size of the State’s economy and the State Government’s annual income.
“Lagos State’s internally generated revenue (1GR), also the highest in the Federation, has risen from approximately N15bn in 1999 to approximately N570bn in 2021. The principal source of this IGR is the burden of taxes and levies borne by its residents and businesses that are productive, earning income, and paying their taxes.”
Noting that the All Progressives Congress government frequently seeks to take credit for significantly increasing the IGR of the state, he said that beyond this, the greater responsibility of the Government is to demonstrate the benefits that residents have derived from this ever-increasing tax burden borne by them.
“Lagos has consistently remained near the bottom of the scale on independently compiled “quality of life” rankings of major cities of the world. For example, Lagos is in 171 position out of 172 cities ranked in the 2022 Global Liveability Index rankings of the Economist Intelligence Unit (EIU) which assesses cities on measures like infrastructure, education, health, culture and environment, stability etc.,” he said.
“If we fail to do this, it is certain that our resources will continue to be misdirected, diverted and misused, our future will be mortgaged through ever-expanding Government borrowing, our development over the next generation will remain tragically stunted and poverty will be widespread,” he said.