Mr. Lateef Raji, Special Adviser to Lagos State Governor Babatunde Raji Fashola on Information and Strategy, has described the accusation by the People Democratic Party, PDP, that the administration diverted the $1billion loan it secured as pure mischief and blackmail.
The PDP had made the allegation in a statement earlier in the month. At the weekend, the party demanded a thorough probe of how the monies were expended.
In an exclusive chat with DailyPost on Tuesday, Mr. Raji explained that the loan in question was being used for people-oriented projects which were not only visible but will stand the test of time.
He also spoke on his future plans, chances of the APC in 2015, the governor’s ambition among other issues. Excerpts:
What is your reaction to the position of the PDP that the loan this administration took had been converted for personal and party use.
My first reaction is that the position of the PDP is ill informed and lacked rational explanation. The allegation is only meant to cause panic and raise a false alarm. The purpose that this loan is serving can be felt and seen. We have not claimed that we did not borrow but I can assure you that our capacity to pay back is very high. Our debt profile is sustainable; it is not a burden, rather, it is an asset. Let me add, and this is important to note, that the loan we obtained will not adversely affect successive administrations. What we have spent this money on is what anyone, any group, the media, the opposition can verify. Political detractors are simply trying to confuse the good people of Lagos. It is possible that they don’t understand but we will not stop educating them. Unarguably, loan is a globally accepted arrangement meant to finance projects. Even our traditional societies understand the concept of loans as a tool of investments. Our fore-fathers, even our fathers took loans to clear new farmlands, to trade, and even to build houses. The difference today, is that they are better structured and institutionalized.
If you look at the Fiscal Responsibility Act and the Country Policy and Institutional Assessment Benchmark for developing economies by the World Bank, our debt service capacity compared to our total revenue is very healthy. In order words, what we spend to service our debt which is 14% is lower than the threshold of 30% set by the World Bank. Can you make your explanation more comprehensible?
Okay, let me break it down. According to the World Bank, if you make N100 million in a month, you are allowed to borrow and service your debt with 30% of what you earn, whereas in this instance, Lagos Government is doing only 14% debt servicing. Which means our debt service capacity is very sustainable.
Again, when you measure our total debt to the GDP, in other words our total revenue ratio, Lagos ranks well at 2.44% whereas the World Bank said the acceptable ratio is 20%. We did not manufacture these figures; they are statistics that are available to the public and whoever is in doubt can contact the World Bank. Our GDP as at 2012 was $80billion, so why mislead the people on $1billion? Why make it a controversy? Is it borne out of ignorance or mischief?
Was there a need for the loan in the first place?
Thank you. We took the loan for infrastructural renewal which we are all witnesses to. We appreciate that Lagos is still not where the world expects it to be and that constantly reminds us the need and urgency to explore ways to raise the bar and do more for the people.
Some projects we used the loan include the Reconstruction of Lagos-Badagry dual carriage-way, the plan has now been extended to 10 lanes; Construction of Ijegun/Isheri-Osun/Isolo within the Jakande Estate area in Alimosho local government area; Reconstruction of Isashi Road in Ojo local government area; Construction of Lagos Rail Mass Transit – Blue Line Rail Phase 2 – that starts from Okokomaiko to terminate at Marina; Upgrading of roads within Apapa local government: Marina road, Bombay crescent, Randle road, Ibikunle Akintoye road, Commercial road and Boma road; Shoreline protection at Bar Beach; Lekki-Epe expressway – acquisition of assets and liabilities of the Lekki Construction Company; Construction of Ajuwon Water Works Phase 2 – 70 million gallons of water; Completion of Ayinke House – for expectant females and nursing mothers – is due next February. All these and more are being funded from the loan so we are being prudent with the fund.
To some people, the thinking is that Lagos generates so much money – N25billion, N30billion and so on. But let us put things into perspective: Assume that Lagos realizes N30billion monthly with over 21million people to cater for, divide that figures and let’s find out the share per head. Taking the result, would the ratio accruable to each resident be sufficient for that person to provide security, water, bridges, healthcare services, schools, roads, traffic light, dispose refuse?
Again, Lagos is safer because of massive investment in security and you will agree with me that the situation has greatly improved. Night life, social activities are back across the state. Years back, this was not possible where even during the day, criminality and hooliganism prevailed. The reverse is the case today; people now sell things till dawn because the whole place is well lit and free of rascality and harassment.
Don’t forget that presently, some filling stations now open all night. All these stimulate growth and development and because we are aware of the advantages and resultant effects on the economy, we made security a top priority and the state is better for it.
By and large, the essence of borrowing is to address infrastructural deficit and the way to go about it is to approach institutions that have enough money in their pool. What Lagos has done is look for the best alternative that offers a low pay back rate. The loan collectively matures at different times.
Some residents of Lagos as well as the opposition often accuse the APC-led government of awarding roads at N1billion per kilometer. Are all roads meant to be that costly?
That view is totally incorrect. In the construction of roads, so many things are involved. There’s what engineers call piling or concrete work; this is done in flood-prone areas. In some cases that alone makes the cost higher than the N1billion amount. Also, some roads require bridges or tunnels or bigger drainage meant to last for many years. All our records are there for scrutiny and like we always say, the opposition is free to bring its own consultants. Lagos uses the same contractors that handle jobs for the federal government so it shouldn’t be hard to compare. Let PDP present its books on road construction while we present ours too. Some argument just does not hold water.
Don’t forget that the topography of this city is unique; Lagos is under water and as such the cost of construction will always be different to that of other states. You can quote me anywhere; all the roads constructed by Governor Fashola will last long because of his insistence for high quality works. He would never settle for less.
Bodies like SERAP, came out that we should explain how we spent the $42million loan we got to finance Eko Project. There is a booklet available on it; they kept quiet when they saw our detailed breakdown. There are web pages dedicated to our debt expenditure and operated by Lagos Debt Management Office. People should search for it online; laws, statistics, Fitch ratings etc are there. Everything is out there in the open.
The governor will leave office in less than nine months, has he anointed a successor?
I don’t know. He is a committed and loyal party man who will support any individual that emerge as the party’s candidate. But as key member, I believe he should have an input in whatever decision is reached.
Do you have an idea of the governor’s plan for 2015?
I cannot authoritatively comment on that. It is normal for every human to be ambitious but the governor has not told me anything yet. However, I am of the opinion that the party leadership and all members nationwide should consider him for a higher responsibility. He has reservoir of energy to devote to the advancement of Nigeria. He is young; he is a champion who has the capacity to deliver on the goodwill of the party. He has done exceedingly well in Lagos.
That he has given a good account of himself is a fact rightly adjudged by not only Lagosians but Nigerians home and abroad. Even our rivals admit this in their living rooms (laughs), so when they come out to talk and issue press statements, they only do so to pacify their pay masters. That they cannot openly declare their admiration for Governor Fashola is understood.
If you cannot categorically comment on his, I’m sure you know yours…
(Cuts in) Please don’t get me wrong. I said the governor is yet to say a word on his future in governance or politics. I also said that he will be ready if the party calls on him. His final decision will of course be known at the appropriate time; so let us wait till then.
For me, I intend to offer myself to the people. I am aspiring to go to the House of Representatives under our great party, the APC, in 2015 to represent Oshodi Federal Constituency 1. It’s all in God’s hand.
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