Recently, the approval granted the Lagos State Government on the Lekki Concession Company (LCC) Loan by the State House of Assembly was mired in controversy. However, the Chairman House Committee On Finance, Hon. Rotimi Olowo, representative of Somolu Constituency 1, in this interview with Oladipupo Awojobi explained in details what the House approved for the state government. Excerpts…
There is a misconception on what the House actually approved for the Executive arm of Lagos State Government. Could you shed more light on this?
The request of Mr Governor basically has to do with the restructuring of the loan. You have seen the fact that Lagos state government took over LCC as far back as 2014 because there was the need for the state to extend the infrastructure to Epe. There are a lot of investors, especially Dangote Group of Company coming up along that corridor. The restructuring Mr Governor sought was the conversion of the loan from private to public sector with sovereign guarantee by the Federal Government. This connotes two different things, we have bought over LCC since 2014, LCC is wholly owned by the State Goverment. Lagos State Goverment has 75 percent of the shareholding, while office of PPP has 25 percent and when you look at it, it is a matter of semantics, the state also owns PPP. So, it is the state government that owns LCC 100 percent. Looking at the condition of loan from Africa Development Bank (AfDB), it comes as a private sector driven loan, which comes with a higher interest loan of 4 percent and it was going to add pressure on the loan obligation of the state. So the state government, through the Commissioner for Finance, is smart enough, with the move that if LCC is owned by the state, while not go for public sector loan, which is just about 0.8 percent and with a better gestation period of about additional 15 years. The private sector loan would have lapsed in 2023 which is about two years away, we now reasoned with the state goverment. There was an agreement since 2019 but because nobody had approached us for a concurrence, we didn’t know but when they came to us, we looked at the benefits therein, extending it by additional 15 years, which is going to extend to 2034 and with a lower interest rate of about 0.8 percent. When you add London Interbank Offer Rate (LIBOR) to that it’s going to be about one percent. This was what they came for and that was what we approved. The need for the clarification is that AfDB and other agencies might think we are playing pranks, we are not playing pranks, the ownership was not part of approval process. So the state goverment can take the approval to FEC, so that we can start paying the loan. Even there is a local aspect of the loan, when the Commissioner came for approval and they reviewed the interest rate downward. What
measures are in place for the repayment of the loan, because currently the collection of tolls at Lekki is suspended?
Whether LCC is operating or not, the fact reamins that we will still pay the loan, there is an irrevocable standing rule to repay the loan. We are to pay bi-annually. Secondly, we don’t want the loan to grow to a point that our children will continue to pay it. We better structure the loan in such a manner that in the next eight or nine years, we should have paid it all, both the local and the international aspects of it. So to ensure repayment, we will always see that it is included in the annual budget. You will appreciate the fact one of the two toll gates is undergoing reconstruction, before the year runs out, we will complete that and obviously we will see what they are doing. I am the Chairman of the House Committee on Finance, and on a quarterly basis we will see their books. For the past eight years, they have been paying the banks conscientiously for the local aspect of the loan. What the state is asking for is downward review so that the loan will not be too overwhelming.
Who are the core investors in the LCC?
The executive didn’t tell us who the investors in the LCC are. What we have said is that we are not just buying it, it has been bought over since 2014 and that has been laid to rest. Lagos State Goverment owns Lekki Concession Company Limited 100 percent.
Few weeks ago, the House reviewed downward the pensions of ex-Governors and their deputies despite being on recess, what made you cut short your break, since the issue at stake was not so urgent?
We came from recess because of this approval (LCC loan). The approval was expected before the end of August and our resumption is in September and it was consumated since 2019. Having lost two years, is it possible for us to cut short our recess and be alive to our responsibility inasmuch as a lot of us are still in Lagos, because there is restrictions as a result of issue bordering on COVID-19, that was why many of us didn’t travel. So there are other issues pending and that of pension was one of them and what we have done is in the interest of the state. We don’t need anybody before we do the needful, it is within our legislative competence to moderate what we give public office holders and what we have done basically is to look at how much is due to them. The essence of keeping pensions for public office holders is for them to be motivated and governors who have worked either for four or eight years. If you have worked conscientiously, how much is the salary we are talking about? The salary of Lagos State Governor is not up to 1 million naira and 50 percent of that for the ex-governors. To me, I think we are not even fair to them. I proposed 100 percent but the majority of members said 50 percent is okay and that is about 500,000 naira. I told them on the floor of the House that the day I went to Baba Lateef Jakande’s house, he was using lantern, because his generator had packed up and you would appreciate the fact that this man worked assiduously for the state as governor to the detriment of his family. He was all over, building Lagos and at the end of the day, when he needed Lagos, nobody remembered him. We don’t have the same socioeconomic status as other states, other states are wallowing in poverty because they are not as proactive and they don’t have great governors as ours and we have governors who had worked and others are coming, how do we appreciate them? So what is 50 percent? When you look at the law we amended, there are other aspects like providing houses for the ex-governors and their deputies and if it has to be a choice place in Lagos and in Abuja, obviously it is going to be in Banana Island. Do you know how much a plot of land is sold in Banana? Somebody who is not governing again, why will he have a house in Abuja? What’s our business in Abuja? We removed it completely. To me, what we have done is to satisfy our conscience and speak for the majority of Lagosians. So many people have called me and said what we have done is the best, especially as regard owning houses in Lagos and Abuja.
We also have in the pension law, an area that touches on past speakers and their deputies
Yes, there are three arms of government, one of them is professional and that is the judiciary. They earn their pensions when they leave office, head of judiciary is the chief judge of the state, he is in service and he is getting all his remuneration, by the time he leaves office he is on pension. When you look at the executive arm, they also have it, but the speaker and deputy, they don’t earn that and whoever is the speaker today is the symbol of the House. If you look at some former speakers, they are being assisted with the help of their fellows. We are not saying other lawmakers should be pensionable but the speaker and the deputy who are the head of our own institution, should be pensionable. So what is sauce for the goose is also sauce for the gander. I am saying it without mincing words, that what is applicable to the judiciary and the executive must be applicable to the legislature as well. Nobody can punctuate what we have done.