The Lagos House of Assembly says it only approved Gov. Babajide Sanwo-Olu’s request to convert the $53.9 million Lagos Concession Company (LCC) private loan to a public sector loan.
The Chairman House Committee on Finance, Mr. Rotimi Olowo (Shomolu Constituency 1), made the clarification in Lagos on Thursday.
The News Agency of Nigeria (NAN) reports that the House committee had during plenary on Aug. 5 presented a report approving full takeover of ownership of Lekki Concession Company (LCC) by the state government.
But the Commissioner for Information, Mr. Gbenga Omotosho, debunked the report, saying that the request by the governor was not to takeover LCC since it had already been done in 2014.
The commissioner added that the request was to convert the loan to a public sector facility. Olowo told newsmen that the clarification became necessary as the loan conversion was to attract lower interest rates from the present 4.2 percent to 1.2 percent from the African Development Bank (AfDB).
He explained that the government took over the company in 2014 to develop infrastructure in the Epe axis, considering the future establishment of Dangote Refinery, amongst others, which was expected to create employment opportunities and bring in more taxes.
The lawmaker noted that the terms of the $53.9 million loan agreement were on 75 percent shareholding by the state government and 25 percent by Public-Private Partnership (PPP).
He said: “Presently, the government owns LCC 100 percent since 2014, but the government decided to take over the company due to its economic advantage in the near future.
“The loan was initially taken as a private-sector loan at an interest rate of 4.2 percent but that it was renegotiated to 1.2 percent interest rate as a public sector loan. thus requiring approval of the state House of Assembly.“
The new repayment period of the loan was based on the ownership structure that has been extended to 2034 so as to reduce the pressure of repayment of loans on the state government.
“The approval by the assembly indicated that out of the $53.9 million loans, $20.1 million with an interest rate of $40 million has been paid so far and there is still an outstanding loan balance of $27.5million.”He said that AfDB granted the international component of the loan, while Zenith, United Bank of Africa and First City Monument Bank, granted the local loan. (NAN)
