Fashola Seeks Fairness For Lagos

Lagos State Governor, Mr. Babatunde Fashola (SAN) has advocated development, fairness, consistency and overall interest of the people as guiding principles for the decisions of the Federal Government on the state.

Governor Fashola, spoke during a sitting of the House of Representatives Committee on Loans, Aids and Debt Management in Abuja during which he shed light on the state’s position on a $600million loan sought from the World Bank in three tranches but which release had been put  on hold after the first tranche on account of its non-inclusion in the Federal Government’s borrowing plan.

Asked by a Committee member and later journalists who wanted to know the reason for the non-inclusion by the Ministry of Finance, the governor who would not impute any motive to the action, however emphasized the need to take cognizance of the state’s population and economic contributions when taking decisions that affect her.

“As I said, I have to be careful what I say here. For me, whatever may be the reasons, I think the interest of over 20 million people must be paramount in policy formulation in this country, that represents more than 10 percent of the population of this country, that is where the largest non-oil contribution to the GDP in this country comes from, that is the place that is home to every Nigerian, that is where you will find somebody who speaks your language, dresses like you, has a tribal mark like you. That is the place all of us call home,” he said.

Continuing, the governor noted that the infrastructure needed by such population also knows no colouration. “So whatever the reasons are, for me, development and fairness and consistency are more paramount and the interest of those people are more paramount, because the roads have no political colour, the water that we also have to provide also have no political colour, and security is politically blind, “ he declared.

Giving the background to the $600 million World Bank loan, Governor Fashola disclosed that the journey actually started on March 3, 2009 when exchange of correspondence started between the Lagos State Government and the World Bank over the issuance of the facility.

The governor, who quoted one of the letters by the World Bank to the state government signed by its Country Director, the bank acknowledged that the government has made “considerable progress in recent years in the delivery of basic services and rehabilitating its infrastructure.”

The World Bank, according to the governor, noted with delight that “existing Bank-supported projects, notably the Lagos State Metropolitan Development and Governance Project (LMDGP) and Lagos Urban Transport Project have contributed very significantly to the development of the people.”

“From this, we started by passing legislation in the House of Assembly and we engaged the Federal Ministry of Finance”, the governor said, adding that the Minister of Finance gave his approval in a letter written on his behalf and dated September 24, 2009 and titled: “Proposed World Bank DPO for Lagos State.”

Governor Fashola further explained, “That the facility was offered to Lagos State as a Development Policy Operation and was to be disbursed in three tranches of $200 million each starting from 2011 and running through 2012 to 2013” adding that the approval for the loan was obtained from the Federal Executive Council and the National Assembly in 2010 leading to the disbursement of the first tranche $200 million last year.

Debunking any notion that the some of the problems with continuing with the DPO was that it was not tied to any project, Governor Fashola said on the basis of the approval, the government changed its budgetary pattern which he announced when he read the 2011 budget late in November 2010.

According to the governor, “We had altered all our financing plans in order to accept this. We slowed down our bond and after disbursing the first tranche late in 2011, we started the process in 2012. It was supposed to be part of our borrowing plans for 2012, some to be funded by bonds but largely to be funded by DPO”.

“But suddenly and perhaps mysteriously, the second tranche which was already captured in our budgetary plans for 2012, was not forthcoming”, the Governor said adding that enquiries as to the reason for the suspension revealed that “the Federal Executive Council found itself in a position where it could no longer willingly support the continuation of the facility”.

The reason for the preference for DPO funding, he said, was because it was “a 40-year financing facility and those are financing facilities that are consistent with financing public infrastructure, they have longer moratorium period and interests are exceedingly low”, expressing dismay that at the middle of the programme “the rules are changed as it were by the regulator.”

“For some reason, Lagos State cannot be accommodated to borrow $200 million when the country is borrowing several billions of dollars. I think that given the responsibility that we have, given our contribution to Gross National Product and given the population that we have to respond to, over 20 million people, it is only meet and proper that in formulating whatever borrowing plans for the country, first of all, priority should be given to an already existing commitment which has been partly disbursed in order to ensure the continuity of the disbursement”, the governor said.