Nigeria’s Most Indebted State, Lagos Secures Juicy $1.35 Billion Deal For Infrastructure
- The Lagos State Government has secured a deal worth $1.35 billion from the Afreximbank in partnership with Access Bank
- The fund would be used to fund infrastructure and provide food security for the residents of the state
- Lagos State is the most indebted state in Nigeria, with $1.2 billion in external loans
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The Lagos State Government and the African Export-Import Bank (Afreximbank), in collaboration with Access Holdings, signed a deal on Monday, October 30, 2023, for a $1.35 billion facility infrastructure and food security in the state.
The parties signed the deal on the sidelines of the ongoing 2023 AfriCaribbean trade and investment forum in Georgetown, Guyana.
Source: Getty Images
The fund is to provide projects for food safety
An Afreximbank representative said the bank would provide the equivalent of the fund in Nigerian currency to fund key trade-enabling projects and promote industrialization and export manufacturing.
The bank said the fund would help to create roads to link up productive areas with consumption places and processing zones, trade hubs and aid the state in sharing and empowering its people.
BusinessDay reports that the bank’s representative said the deal is very strategic for Afreximbank because it is taking financing closer to the people by supporting sub-sovereigns, stating that it has been in the works with the Lagos State government in partnership with Access Bank.
Lagos currently executing 5 legacy projects
Lagos State Governor Babajide Sanwo-Olu told journalists at the signing ceremony that the state’s legacy projects will impact the residents of Lagos State.
Sanwo-Olu revealed that the state is currently executing five legacy projects, with the first being the fourth mainland bridge that will begin from the Aja end of the state onto Ikorodu and move to Lagos-Ibadan Expressway.
The second project is the Omokrik project, an infrastructure that will unlock vast real estate and infrastructure to the landlocked areas in Lagos due to the crossing of the body of water to access the land. He said the third is the Lekki Airport.
The Group CEO of Access Holding Plc, Herbert Wigwe, said the deal is remarkable and is one of the most outstanding transactions that has come up in recent times.
Lagos is Nigeria's most indebted state
It is still being determined if the deal is a loan from the bank.
According to the Debt Management Office, Lagos is the most indebted state in Nigeria, with over $1.2 billion in external debt.
Legit.ng data shows that the state’s debts are primarily from bonds, which it used to fund projects.
Also, the state remains on top of the list in Nigeria as the state with the highest Internally Generated Revenue (IGR).
Analysts believe that the state will not have challenges with its bilateral loans because it is one of the most viable states in Nigeria.
Nigerian states borrow N46bn from Access Bank, Zenith Bank, Fidelity to pay salaries
Legit.ng reported that Nigerian state governments borrowed about N46.17 billion from three banks to pay salaries between January and June.
This was disclosed in the banks' 2023 half-year result.
Findings show that the states borrowed the most from Access Bank in six months, with about N42.97 billion in the period under review.
Source: Legit.ng
