The Lagos State government announced that it had so far saved N5.990 billion using the Treasury Single Account, TSA.
The Commissioner for Finance, Mustapha Akinkunmi, who revealed this spoke with newsmen at the ongoing Ministerial briefing in Alausa, on Wednesday, May 11.
He said the implementation of the TSA had helped to enhance transparency and efficiency, besides boosting Internally Generated Revenue (IGR) through seamless generation, collection and improved cash management.
“The present administration has successfully re-engineered the state’s outstanding internal loans to reduce burden on IGR and technically saved N3.8 billion per month,” He said.
“This was achieved by re-negotiating interest rates from an average of 18 per cent monthly (N5.35 billion monthly payment) to 12.5 per cent (N1.52 billion monthly payment). The state restructured its outstanding bonds from bullet payment to amortizing payment to reduce debt service resulting in huge savings recorded from this initiative.
“Through this, we have also achieved savings of over N500 million in monthly contributions to Consolidated Debt Service Account (CDSA) and over N40 billion saved in interest payments over the lifetime of the instruments.”
Akinkunmi, said the state won virtually unanimous approval for the restructuring at the Bondholders’ Extraordinary General Meeting, reflecting the strong relationship between the state and the capital market. He added that such feat affirmed confidence in the strength of the state’s credit worthiness.
“In fact, the International Credit Rating Agency, Fitch Ratings, released a report in March 2016. To quote the report, Fitch’s affirmation reflects its expectations of “strong operating performance in the medium term, outstanding sophistication and transparency management compared to local standards, as well as satisfactory debt metrics.
“The state continues to make progress in financial management, on the back of progressive policy implementation.”
