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news you can trust I ** thursDAY 12 DECEMBER 2019 I vol. 19, no 455 I N300 g www. g @ g Buhari’s proposed $22.72bn BD Investigative Series loan in line with debt strategy, favours economy How Lagos’ revenue goes – Debt office SEGUN ADAMS he Debt Management Of- into private pockets fice (DMO) says moves by TPresident Muhammadu ODINAKA ANUDU Buhari for a $22.72bn (N6.9 trillion) external loan is in line nce you click on with objectives for Nigeria to http://www.lasaa. tap into cheap long-term debt com, the official in the international market for website of the La- fixing infrastructure gaps and gos State Signage & moderating the country’s level OAdvertisement Agency (LASAA), of debt servicing. you will be welcomed with a DMO’s defence comes amid caveat, “We do not accept cash public concerns about Nigeria’s payments.” rising debt burden. Perhaps, the manager of the The debt office, alongside website could also have added, the finance minister and the “We do not recognise private minister of works, on Tuesday accounts.” defended the borrowings before The reason is simple: LASAA the House of Representatives at Isolo Local Council Devel- Committee on Aids, Loans and opment Area (LCDA) accepts Debt Management. President cash payments in violation of Buhari had failed to secure the that warning. Worse still, busi- approval of the 8th Assembly for nesses in the LCDA pay LASAA the same loan in his first term. rates into a private Zenith Bank “The proposed new borrow- account belonging to an indi- ing is consistent with the subsist- vidual, Assumpta Omozejele, ing Debt Management Strategy who is in charge of the agency in which seeks to replace short- the LCDA, BusinessDay investi- term high-interest cost domestic gation shows. debt with low-interest long-term LASAA is an agency respon- sible for regulating and control- Continues on page 38 ling outdoor advertising and signage displays in Lagos State. It displays two bank accounts Inside on its website: Zenith Bank ac- count (1011119620) for enforce- Reps move to end ment, and Eco Bank account (2832037833) for mobile permit N600bn monthly loss and branding. But swathes of L-R: Abubakar Suleiman, chief executive officer, Sterling Bank; Bright Jaja, convener, iCreate Skills Festival, cash from businesses at Isolo to Apapa gridlock and Chukwuemeka Nwajiuba, minister of state for education, during Africa’s biggest technical skills and voca- P. 2 tion competition powered by Sterling Bank in Lagos. Continues on page 38 38 BUSINESS DAY Thursday 12 December 2019 news Buhari’s proposed $22.72bn loan in line... Continued from page 1 than desirable due to low rev- enue to the government and external debt and is one of the providing strong justification measures that is being imple- for the government’s push for mented to moderate the level more oil and non-oil revenue. of debt service,” the DMO said Lately, the government has in a press release. taken steps to increase its rev- Domestic debt costs Nigeria enue through a new Finance as high as 16 percent to service Bill and Strategic Revenue annually. Last year the govern- Growth Initiative that will ment paid N1.8 trillion to ser- increase its intake from VAT, vice its local debt compared to among other things, and has $1.47bn or around half a trillion also amended the PSC Act naira for external debts. (Deep Offshore and Inland According to the debt of- Basin Production Sharing) to fice, the objective to restruc- increase its income. ture Nigeria’s debt mix has Nigeria’s debt service to seen a declining share of do- revenue last year was at 51 mestic debt in the total public percent, 6 percent points debt from over 83 percent in lower than in 2017 owing to December 2015 to about 68 the increase in the debt stock percent in June 2019. DMO and relatively high domestic wants domestic debt to be 60 interest rates, DMO said. L-R: Simi Nwogugu, executive director, Junior Achievement Nigeria (JAN); TC Achievers team; Enoch Vanderpuye, country percent of its total borrowings. It also said Buhari should team lead, marketing & corporate communications, FBNBank Ghana, subsidiary of FirstBank; TC Achievers team and staff The $22.72bn loan Buhari not be blamed for the public of JAN sponsored by FirstBank to represent Nigeria at the African Company of the Year (ACOY) competition held in Ghana. seeks lawmakers’ approval for debt stock, at N25.7trn as at would be sourced from mul- the last count in June, because show that a lot of govern- tilateral and bilateral lenders Lagos State government the debt stock is a cumula- How Lagos’ revenue goes into private... ment revenue may be going is struggling to cope with like the World Bank, Africa tive figure of borrowings by Development Bank, China Continued from page 1 businesses are ready to pay into private pockets. population explosion as successive governments over In Ikeja Local Govern- Exim Bank, among others. LCDA are paid into a pri- certain government fees, infrastructure deteriorates. many years. levies or taxes. ment Council, traders with- Critical infrastructure such The loans are concession- BusinessDay reported vate account of Omozejele. al, semi-concessional, and At Mushin LCDA, I met out standard shops at Ogun- as light rail is lacking in the Monday that the country’s After a series of com- biyi Community Develop- long-tenored which would be debt stock has almost tripled plaints about Omozejele a man, Aliu Olaoye, who state as the government used for financing infrastruc- claims to work as a member ment Authority pay as much struggles with cash to ease in the last four years with and her high-handed task- as N1,800 every day. The ture and other developmental little to be shown for the bor- of the taskforce. I told him I movement. But the money force team which collects money is collected by three social projects, the govern- rowings, which has caused payments without issuing had a shop at Isolo Road and to rehabilitate and build ment said. sets of touts who do not issue many concerns over the receipts, this BusinessDay he asked me to pay a parking infrastructure appears to be BusinessDay reported the receipts or tickets for the pay- move to add $22.7bn to the reporter went undercover as permit of N30,000 and shop suffering leakages. loan is the final tranche of a stock. fee of N5,500 into his Polaris ments. Some of them claim to “The state should desig- $29bn infrastructure plan first a business owner at one of the be ‘land owners’ while others Bababtude Fashola, min- streets at Ajao Estate in Isolo Bank account. In a recorded nate accounts for payments tabled by Buhari in 2016, and ister for works, however, said telephone call, he promised pretend to be working for the of all levies and taxes, and would cost Nigeria over half a LCDA to verify the claims. local government. the country cannot ignore the I visited Omozejele’s to pay N20,000 to Mushin start a campaign to educate billion dollars annually to ser- concerns and demand for the Local Government, while “Some of us have decided people on why they must vice for an average of 21 years. office and told her I was provision of life-sustaining he and ‘the leader’ would to stay outside of that place. pay into official accounts,” The DMO said Nigeria constructing a signpost. We infrastructure would have a pocket N5,000 each. Yet we pay N25,000 every year Amadi said. has a low debt to GDP ratio positive multiplier effect on both agreed that it was a 3 to the area boys,” a trader, which is below the maximum square-foot signpost and “Oga, this is Mushin. As “There must be a mecha- the economy. you know me, nobody will who preferred anonymity be- nism for punishing people 25 percent limit, by the Fiscal Asides infrastructure, oth- she asked that I pay N14,784 cause of her safety, told me. Responsibility Act. touch you except the person who extort money from busi- er loans such as those for the for that, including N6,000 In Oshodi Local Gov- Debt to GDP by end of wants to die,” he told me. nesses after they pay their educational sector will con- for registration and N7,392 ernment, more businesses June 2019 stood at 18.99 per- (50 percent of the original I finally paid N5,000 into taxes,” he said. tribute to the development his account, assuring to pay are outside the shops than Muda Yusuf, director- cent down from 19.09 per- of Nigeria’s human capital, rate) for advertising. The total cent at the start of the year, the rest later. He called many inside. This is tied to the cost general, Lagos Chamber of while loans for agriculture amount I would pay, from her of shops in the area. A shop which means Nigeria’s ratio will be used to diversify the calculations, was N28,176. times to find out the location Commerce and Industry, is relatively low compared to of the shop, but I assured costs N1.2 million to N1.8 said most of the inaccu- economy. But she promised to ‘prorate’ million annually, and small countries like United States, There will also be funding him he would learn the loca- racies are found in local the payment and asked me businesses are often asked China and Canada, the debt for Development Finance to pay N15,000 for the whole tion soon. governments than the state office said. to pay between two and Institutions to enhance access of 2020. In a recorded phone The phenomenon is government. It, however, admitted that five years. As many cannot to finance for micro, small and call, she reduced the amount not limited to the two local “We need to put technol- Nigeria’s debt service to rev- medium scale enterprises, governments. At Alimosho afford it, they choose to stay ogy in place,” he said. “Urge enue ratio has been higher to N13,000 and read out her in make-shift shops and in DMO said. account number to me. I LCDA, I asked two young people to pay into the bank men the way to the revenue open areas. Yet, these micro and monitor the process.” paid the agreed amount on businesses pay between Reps move to end monthly loss of N600bn... December 10 and demanded office and they claimed they Ike Ibeabuchi, managing were in charge of it. One of N500 and N1,050 every day. director of MD Services Lim- Continued from page 2 The contractor had told a receipt in a text message the None of these payments is following day. them gave me his account ited, a servicing and manu- BusinessDay that they had number to pay in shop per- receipted. Business owners facturing outfit, said public Gas Workers (NUPENG), to leave site because of “Don’t worry it does not told this reporter that they Depots Association of Pe- matter am the only one in mit of N3,500 for 2019, de- offices should not be used the political uncertainty spite that it is less than three pay N500 to N1,000 to Kick to compensate individuals troleum Products Market- that surrounded the Am- charge of Ajao but if you Against Indiscipline (KAI) ers of Nigeria (DAPPMAN), still want it you can come weeks to the end of the year. after elections. bode administration’s last BusinessDay’s three officials who mostly harass “People who pay these Major Oil Marketers Asso- months in office as no -of around,” she replied in an them from time to time. ciation of Nigerian (MO- unedited text message. weeks of intensive investi- fees into private accounts ficial contract agreement gation on taxes across Lagos “The best way to plug the should know they are tak- MAN) and Association of was signed between it and Entrepreneurs at Isolo revenue leakages is through Maritime Truck Owners LCDA told me that there is ing a risk. So they should the state government to technology,” Eme- also be bold enough to re- (AMATO). guarantee payment amid no specific amount for both The Ambode-led ad- shop permit and LASAA ka Amadi, group port any official who wants the unstable political atmo- head of tax at Unit- public funds paid into their ministration had brought sphere in the state prior to rates – it all depends on in Planet Project Limited, who you know and agree- ed Bank of Africa, private accounts,” he sug- the 2019 general elections. said. gested. a construction firm which Apapa and its environs ment you reach with them. A also handled key infra- have remained a sad nar- young lady whose shop was structural projects in the rative in terms of gridlock locked paid N9,000, but she state, to begin work at the and traffic management, as was issued with a receipt for site. According to the gov- efforts by both federal and N4,500 after demanding it ernment at that time, the the state authorities have for two months. proposed park would take led to nothing cheery. If you think that Isolo about 2,800 trucks and The roads and bridges is the only culprit, you are petroleum tankers. But the have remained blocked mistaken. Government offi- project was abandoned year after year, forcing busi- cials, especially those work- as Planet Project subse- nesses to close shop and ing for local governments, quently mobilised its per- residents moving out to are always quick to present sonnel and equipment out “saner” areas of the state. their account numbers once of the site. www.businessday.ng https://www.facebook.com/businessdayng @Businessdayng