Lagos Borrows Another N39.4bn Loan From World Bank

The World Bank has just approved $200m (about N39.4bn) loan to Lagos state. The loan, which has been accepted by the state governor, Akinwunmi Ambode, will be used for reforms such as fiscal sustainability, budget planning, budget execution and improvement of the investment climate in the state. According to the World Bank, the credit is for sustaining the ongoing economic growth and poverty reduction, and the delivery of social services to the fast burgeoning population of the state. The loan, which is sourced from the International Development Association segment of the World Bank Group supports the Third Lagos State Development Policy Operation and is the last of a series of two development policy operations, which aims to improve public finances and the investment climate in a fiscally sustainable manner. In granting the loan, the bank praised the authorities of Lagos state for the giant strides they have made in achieving a remarkable economic growth and improvement in infrastructure and services, significant reduction of crime, and bringing millions of people out of poverty. The leader of the task team who handled the project, Jariya Hoffman, emphasized that with the enhanced budget transparency and efficiency, adequate funding will now be devoted to programmes which will benefit the state’s booming population, especially those at lowest wrung of the ladder. Jariya further said: “The operation’s focus on furthering improvements in the transparency of the budget system, effectiveness of public expenditures, and the business climate will help sustain the pace of economic growth and thus the state’s positive momentum towards income equality and the delivery of public services.” In his remark, the World Bank Country Director for Nigeria, Marie-Francoise Marie-Nelly, said: “This operation is designed to assist Lagos State in its quest to continue its recent success in spite of the challenges brought on by rapid economic and population growth. “As an urban agglomeration that has reduced income inequality during double-digit economic growth, Lagos is an example of inclusive growth in Nigeria. If the Lagos experience is sustained, there is strong potential for this type of inclusive growth to spread to other parts of Nigeria.” The bank said that the operation will enhance the state government’s fiscal sustainability by anchoring the budget on a framework that accounts for key fiscal risks and improves revenue collection. Support for adopting a new approach to budget planning and preparation will ensure adequate allocation of budgetary resources to social services such as education and health.