The Lagos State House of Assembly has given reason for its approval of Governor Babajide Sanwo-Olu’s request of N85bn special dispensation for bond redemption and for bridge loan.
According to a statement by the Chairman of the House Committee on Finance, Mr Rotimi Olowo, the request by Sanwo-Olu would ensure continuation of capital projects in the state.
He said, “Based on briefing and documents received, the redemption of bonds will allow for extension of maturity of the same with a two years moratorium in 2031.”
Olowo further stated that the request from Sanwo-Olu was “an approval of bond for a bridge loan which will allow the state to access the bond market, while the second aspect is a loan from a commercial bank at the interest rate of 9.25.”
“What it means is that, in the next two years, after securing the bond, we will not pay any money. We will not pay the interest and the capital; it will be like a tax holiday. It will relieve the state of the burden of sourcing for money to pay the creditors.
“When you look at our Consolidation Debt Service Account, we have about N22bn and we are talking N101.2bn in the next two or three years. It will amount to a lot of pressure on our debt obligation. So, what we thought is necessary is that we should quickly access the bond market so that we can get it at cheaper rate and it will be for 10 years with two years moratorium,” he added.