The most populous state in Nigeria Lagos state is the most indebted state of the federation with a total foreign debt of N55.38 billion ($369.20 million), according to the Debt Management Office in Abuja, Nigeria. Lagos has 20% of Nigeria’s sub-regional foreign debt stock.

Can the governor of Lagos state explain this?

Orikinla:

The most populous state in Nigeria Lagos state is the most indebted state of the federation with a total foreign debt of N55.38 billion ($369.20 million), according to the Debt Management Office in Abuja, Nigeria. Lagos has 20% of Nigeria’s sub-regional foreign debt stock.

Can the governor of Lagos state explain this?

He cannot. He refused to run as VP, because he was scared that his contracts would be used against him.
That said, we must give it to him for showing visible performance, however thats no excuse for profligacy and mortgaging future generations of Lagosians.

It would seem that so much tax revenue has been raised only to subsidise the acquisition of choice assets by powerful ACN members. Lagos seems to have been sold to a few people and the money is oiling a new mafia that is sophisticated and dangerous.

Orikinla:

The most populous state in Nigeria Lagos state is the most indebted state of the federation with a total foreign debt of N55.38 billion ($369.20 million), according to the Debt Management Office in Abuja, Nigeria. Lagos has 20% of Nigeria’s sub-regional foreign debt stock.

Can the governor of Lagos state explain this?

that is not a big deal provided it is used judiciously

Beaf:

He cannot. He refused to run as VP, because he was scared that his contracts would be used against him.
That said, we must give it to him for showing visible performance, however thats no excuse for profligacy and mortgaging future generations of Lagosians.

It would seem that so much tax revenue has been raised only to subsidise the acquisition of choice assets by powerful ACN members. Lagos seems to have been sold to a few people and the money is oiling a new mafia that is sophisticated and dangerous.

Oh come on. You don't need to be partisan with every piece of news you receive. The part in bold is just plain mischief and a tad childish. Do you have any proof to that effect or are we just supposed to take your word for it?

Sky Blue:

Oh come on. You don't need to be partisan with every piece of news you receive. The part in bold is just plain mischief and a tad childish. Do you have any proof to that effect or are we just supposed to take your word for it?

that is not the crux of the matter,the state is indebted and developed more than others in the country.

It is not about borrowing but the judicious use of the funds.USA,Germany and Japan are some of the worlds biggest debtors.

aguiyi:

that is not the crux of the matter,the state is indebted and developed more than others in the country.

? ? Don't know what this comment has to do with my post.

$369 million debt?

When the annual budget of the state is $2 billion+?

If the debt were $10 billion, then yes, I'd say there is a problem. But given that the GDP of the state is $30 billion+, 369 mil is a drop in the ocean.

States like Dubai and Italy iirc have debt to GDP ratios well north of 80%+.

1% will not kill Lagos. . . if anything, Lagos should borrow more to accelerate development.

Sky Blue:

Oh come on. You don't need to be partisan with every piece of news you receive. The part in bold is just plain mischief and a tad childish. Do you have any proof to that effect or are we just supposed to take your word for it?

You owe me an apology.

The Lagos State governor was said to have argued at the meeting with Ribadu that he had so many unfinished works in the state and that his successor in 2011 might use the non completion of some projects to blackmail him.

http://www.tribune.com.ng/sun/index.php/news/1872-why-fashola-rejected-ribadu-ticket-tinubus-strategy-fails-pitfalls-in-ribaduoshiomhole-alliance

Fashola reportedly told Ribadu that he had so many unfinished works in the state and that his successor in 2011 might use the non completion of some contracts to blackmail him.

http://allafrica.com/stories/201008100376.html

eku_bear:

$369 million debt?

When the annual budget of the state is $2 billion+?

If the debt were $10 billion, then yes, I'd say there is a problem. But given that the GDP of the state is $30 billion+, 369 mil is a drop in the ocean.

States like Dubai and Italy iirc have debt to GDP ratios well north of 80%+.

1% will not kill Lagos. . . i[b]f anything, Lagos should borrow more to accelerate development.[/b]

good one

you are one smart man but a tribalistic one as well just like awolowo

alj harem:

good one

you are one smart man but a tribalistic one as well just like awolowo

I'm not a tribalist, just interested in spending my energy fixing the SW.

eku_bear:

I'm not a tribalist, just interested in spending my energy fixing the SW.

just joking, yes you have every right to develop your people's land

just like other have done before you

dapo, Good luck and Allah be with you

Orikinla:

The most populous state in Nigeria Lagos state is the most indebted state of the federation with a total foreign debt of N55.38 billion ($369.20 million), according to the Debt Management Office in Abuja, Nigeria. Lagos has 20% of Nigeria’s sub-regional foreign debt stock.

Can the governor of Lagos state explain this?

Have you heard of PPP before, or BOT? i.e Private parties borrow funds with a guarantee provided by the govt and repay the funds as they generate income from the investments,
The State govt will not be required to payback these monies, they will be recouped from the investments and infrastructure services

@Orikinla

your plan don fail

369 million


This is one of the dumbest and pointless posts on NL ever ever,

eku_bear:

$369 million debt?

When the annual budget of the state is $2 billion+?

If the debt were $10 billion, then yes, I'd say there is a problem. But given that the GDP of the state is $30 billion+, 369 mil is a drop in the ocean.

States like Dubai and Italy iirc have debt to GDP ratios well north of 80%+.

1% will not kill Lagos. . . if anything, Lagos should borrow more to accelerate development.

Not all debt is good debt! We are suffering that here in the USA/.

Most debt in Nigeria can be good debt, if spent efficiently and on reasonable projects (not floating cities, as GEJ proposes).

The right analogy (I think) is a proposition in which you can borrow at 10% and invest in something that yields 30%+. Clearly you win massively.

Obviously the goal of the government isn't to seek profits. . . but the benefits of say light rail are huge, and are passed onto society. And there are many such capital projects that are hugely beneficial to the people, vastly more so than the money spent. (Most of this is true just because the existing infrastructure in Nigeria is pretty terrible. So anybody who borrows to fix this is going to be providing far more benefit than the money he spends.)

OTOH, since the US is a very well-developed country, there are less opportunities to borrow and spend on things that will dramatically boost the economy. Analogy might be borrowing at 6%, getting a return of 10%.

Or in certain infrastructure projects done in say Alaska (e.g., the bridge to nowhere), might be getting a negative return on investment 

I'd love to see Lagos at $10 billion or so in debt, so long as I can guarantee that:
A) The money will largely be spent on good projects
B) The projects will be completed, money isn't stolen away (at least, not too much).

^^ Nice

eku_bear:

Most debt in Nigeria can be good debt, if spent efficiently and on reasonable projects (not floating cities, as GEJ proposes).

Sigh!
But the reality  is that has not been the case! I rather we deal with the reality of our situation when we look at these things, FOR OUR OWN GOOD. The President is borrowing money too, and people are concerned, rightly so too.

eku_bear:

I'd love to see Lagos at $10 billion or so in debt, so long as I can guarantee that:
A) The money will largely be spent on good projects
B) The projects will be completed, money isn't stolen away (at least, not too much).

sigh . . .  We would all love to see Lagos become a Dubai/London/NY too but the fact is NOT ALL DEBT is GOOD DEBT and so as the state acquires more of it, it is sensible for people to question the need for all the debt. There are other states out there, equally developing, but not accruing debt at the same pace Lagos is.

Here is another analogy, Kobo.

US medical school education. Most people go heavily in debt to pay for med school. . . .not sure what the average debt level is, but $200K is not atypical. But obviously the longterm benefits make it worthwhile. Medical school is like borrowing from the federal government at say 5 or 6% and investing in a project (namely your education) that will give you a massive return (I've never really calculated what the rate of return is for being a medical doctor versus other jobs that pre-med students can get, but I imagine it is pretty high.)

Anyway, long story short, debt CAN be good, if you invest the money properly. Lagos for the most part invests its money better than the other states in Nigeria (and obviously better than the federal government.)

No need for more of your analogies. We already know that not all debt is good debt! It does not take a genius to figure that one out . What we ought to be concerned with instead is ensuring that every single dollar of that debt went to a worthy project and was used wisely to develop the state, not for the rich alone, but for every single state resident. Yes, development has to take place but at the same time, is the state exploring other ways of creating wealth for itself so it does not keep racking up these debts for so so long? As someone already pointed out there are other states developing at almost equal paces and they are not as deep in debt as Lagos.

Kobojunkie:


Sigh!
But the reality  is that has not been the case! I rather we deal with the reality of our situation when we look at these things, FOR OUR OWN GOOD. The President is borrowing money too, and people are concerned, rightly so too.

Well, to answer this question we'd need to know what exactly the money Lagos has borrowed was spent on. And. . . what does the president have to do with this? We are talking about Lagos, not the FG, right? I do NOT want the Nigerian FG to borrow much money, since I have no faith in their ability to spend this money properly. Lagos can borrow as much as it likes since I trust its government. Nigerian FG should not.

sigh . . .  We would all love to see Lagos become a Dubai/London/NY too

Who said anything about Dubai? I don't even think in that sort of way. . . I'm sort of a case by case sort of person. Does this project merit borrowing money? I won't borrow money for a project that makes no sense just because of some Dubai fetish.

but the fact is NOT ALL DEBT is GOOD DEBT and so as the state acquires more of it, it is sensible for people to question the need for all the debt.

Oh, I completely agree. Every time Lagos borrows, we need to know what they are spending the money on.

There are other states out there, equally developing, but not accruing debt at the same pace Lagos is.

Name some names? Which states are developing as well as Lagos? And if you are comparing to an oil-producing state, then your comparison must be taken with a grain of salt. Rivers for example gets an assload of oil cash, and has much smaller population.

Anyway, you miss the point. If I have a business, it might be growing pretty well even w/o me borrowing any money. But if I've identified some 15% opportunities, I'd be growing even faster if I borrow money at 5% to take advantage of those opportunities.

eku_bear:

Well, to answer this question we'd need to know what exactly the money Lagos has borrowed was spent on. And. . . what does the president have to do with this?
We are talking about Lagos, not the FG, right? I do NOT want the Nigerian FG to borrow much money, since I have no faith in their ability to spend this money properly. Lagos can borrow as much as it likes since I trust its government. Nigerian FG should not.

hhm m m ,  I hope you re-read the above to understand how I think it is sort of from a biased point of view. You have no real info on what exactly the money Lagos has borrowed so far has been, and is being, spent on but you are all too willing to say "BORROW-ON, MR GOVERNOR"?

eku_bear:

Who said anything about Dubai? I don't even think in that sort of way. . . I'm sort of a case by case sort of person. Does this project merit borrowing money? I won't borrow money for a project that makes no sense just because of some Dubai-fetish.

Well, there are others who have dubaish dreams of development for lagos. If you read my post, there you would see that it was not about just your ideas of what you would like to see in terms of development in Lagos.

eku_bear:

Name some names? Which states are developing as well as Lagos? And if you are comparing to an oil-producing state, then your comparison must be taken with a grain of salt. Rivers for example gets an assload of oil cash, and has much smaller population.

Enugu, Anambra, Kaduna  . . . . Yes, some are oil producing states but even oil producing entities CAN borrow  for projects as well.

eku_bear:

Anyway, you miss the point. If I have a business, it might be growing pretty well even w/o me borrowing any money. But if I've identified some 15% opportunities, I'd be growing even faster if I borrow money at 5% to take advantage of those opportunities.

To this, again I say, not all debt is good debt, and debt is no guarantee for development. Plus, you have to pay the debt back at some point. So it makes sense, again, to ensure that we only borrow when we have to. I mean this is all I have been saying and continue to say.

hhm m m ,  I hope you re-read the above to understand how I think it is sort of from a biased point of view. You have no real info on what exactly the money Lagos has borrowed so far has been, and is being, spent on but you are all too willing to say "BORROW-ON, MR GOVERNOR"?

I see your point a bit, but a lot of it is trust and reputation. I only vaguely know about the composition of US debt and obligations, but overall I (and the world in general) feels safer investing their money in US treasury bonds than any other investment in the world.

Anyway, long story short, I trust the Lagos State gov't to spend its money more efficiently than the Nigerian FG.

Enugu, Anambra, Kaduna  . . . . Yes, some are oil producing states but even oil producing entities CAN borrow  for projects as well.

What is your basis for saying these states are doing as well?

To this, again I say, not all debt is good debt, and debt is no guarantee for development.

Kobo, but this is all obvious, no? We all know it to be true.

Plus, you have to pay the debt back at some point.

This is true of debt in general. But that I have to pay back is not what I use to decide whether to take out a loan or not.

So it makes sense, again, to ensure that we only borrow when we have to. I mean this is all I have been saying and continue to say.

What does "have to" mean, though? It isn't very practical advice unless you define what your threshold for "have to", is. Right now, very nebulous.

"Have to" simply means we not get into unnecessary debt.   This goes with the message "Not all debt is good debt".

Kobojunkie:

"Have to" simply means we not get into unnecessary debt.   This goes with the message "Not all debt is good debt".

How do you define "unnecessary"?!?!?!

That is my whole point. You've added nothing to the discussion unless you've defined unnecessary.

Obviously, nobody wants to go into unnecessary debt. But which ones are necessary and which ones are not?

Really !!!