Lagos State governor Babajide Sanwo-Olu has explained why Lagos has the highest debts ratio, both foreign and domestic, in Nigeria.
The latest data from the National Bureau of Statistics (NBS) had placed Lagos State as the state with the most indebted in Nigeria in the first quarter of 2024 with domestic debt of N929.41 billion, followed by Delta State at N334 billion.
While reacting on a TV programme to the debt profile of the state, Governor Sanwo-Olu said there was no cause for alarm with rising Lagos debt profile , assuring Lagosians that the borrowing level is within sustainable limits.
He noted that the national benchmark for debt ratio is 40%, assuring that the state’s debt to revenue ratio is still below the benchmark.
“The standard debt ratio we are meant to meet is about 40%, but today, we are around 28-29%, so we are not even close to the threshold,” the governor stated.
Justifying the reason for the debt, Sanwo-Olu argued that the debt incurred by the state is used to invest in the state’s infrastructure, adding that the state has the capacity to absorb debt up to N20 trillion.
“This N2 trillion debt figure is just a number. Lagos has the capacity to manage up to N20 trillion. In fact, my team initially proposed a N6 trillion budget this year, but we settled on N2 trillion to remain prudent,” Sanwo-Olu added.
“When we came into office, we inherited a budget of N620 billion. Today, Lagos is working with a budget of N2.3 trillion, and by the end of this year, we expect to close at about N2.5 trillion,” Sanwo-Olu further said.
The governor noted that the state is efficient in managing its finances evident in the 95% performance of its budget annually for developmental projects.
“Our investments today will yield returns tomorrow,” he said.
