Lagos Assembly approves ownership of LCC

Posted by Godwin Onyemaechi

Lagos State House of Assembly has granted the request of Governor Babajide Sanwo-Olu to convert the Lekki Concession Company Limited (LCC) to a government-owned firm.

The request was received from the executive arm on June 21, and was committed to House Committee on Finance for further look and report of its findings.
The Chairman of the committee, Rotimi Olowo, said upon the buy-out of LCC shares by the government, Lagos State will become a subsisting shareholder of LCC with 75 per cent shareholding and the Office of Public Private Partnership (PPP) with 25 per cent shareholding.

He added that the original $53.9million loan obligation from the African Development Bank (AfDB) had been resolved after engagements between AfDB, LCC and the state government to convert the loan to a public sector facility with the benefit of a considerable reduction in interest charges of 1.02 per cent of $1.12million bi-annual, as against the 4.12 per cent of $2.746 million per bi annual, thus giving a savings of $1.16 million bi-annual or $3.24 million per annum.

The assembly, therefore, granted the executive the approval to convert the AfDB loan to a public sector loan backed up by sovereign Federal Government guarantee on behalf of the state government.

It authorised the state government to issue a counter guarantee in favour of the Federal Government, together with an Irrevocable Standing Payment Order (ISPO) to deduct from the Lagos State Government statutory allocations.

According to the report, the servicing of the loan obligations will be in maturity till August 2034.

Debating on the report before the initial approval, Gbolahan Yishawu, a lawmaker, supported the recommendation, saying it was a smart move, as the interest rate would not injure the state’s spending on capital expenditure.
He added that it would also reduce the interest risk and rate by moving the loan from private to public sector.

Femi Saheed, another legislator, said restructuring the loan showed transparency in the state’s finance, adding that it gave add-on flexibility for the additional years granted for the loan repayment.

He deemed the request a standard financial procedure practised all over the word.

Speaker Mudashiru Obasa directed the acting Clerk, Olalekan Onafeko, to send a clean copy of the resolution of Governor Sanwo-Olu.