The Lagos State House of Assembly has approved the state government’s request to raise N200 billion through a bond and participate in the Federation Account Allocation Committee (FAAC) Receivables Discounting Programme to finance critical infrastructure projects across the state.
The approvals were granted on Thursday following the adoption of the report of the Joint Committee on Economic Planning and Budget and Finance during plenary.
Presenting the report, Chairman of the Joint Committee, Sa’ad Olumoh, said the committee had reviewed the executive’s requests and found them suitable for legislative approval.
Olumoh said the Commissioner for Finance, Abayomi Oluyomi, informed the committee that the Federal Government introduced the FAAC Receivables Discounting Programme following a proposal by the Nigeria Governors’ Forum to enable states to access immediate funding for infrastructure development.
Under the arrangement, participating states would execute an irrevocable standing payment order authorising the Accountant-General of the Federation to deduct agreed sums from their monthly FAAC allocations over an 11-month period.
The deductions would then be paid into a sinking fund managed by the Debt Management Office and domiciled with the Central Bank of Nigeria.
Olumoh said the arrangement would provide Lagos with immediate liquidity to fund priority capital projects, including legislative quarters and other strategic infrastructure.
The committee also recommended approval for the state to raise N200 billion through a Series V conventional bond under its existing N1 trillion Debt and Hybrid Instruments Issuance Programme.
Contributing to the debate, Chairman of the House Committee on Waterfront Infrastructure, Gbolahan Yishawu, described the FAAC facility as an advance-payment arrangement under the Irrevocable Standing Payment Order framework rather than conventional borrowing.
Yishawu said the programme would strengthen the state’s revenue profile as it attracted no interest, but urged the government to clearly identify the projects to be financed with the proceeds.
He also called for transparency in the implementation of the arrangement to ensure that it represented a restructuring of funding sources rather than an increase in the state’s overall budget.
The Speaker of the House, Mudashiru Obasa, supported the borrowing plan, maintaining that responsible borrowing remained necessary to finance capital projects and accelerate infrastructure development.
Obasa explained that the increase in the proposed bond to N200 billion was driven by additional funding requirements and was not the result of a computational error.
He added that the utilisation of the funds would remain subject to legislative oversight and approval to ensure accountability and prudent financial management.
Following deliberations, lawmakers unanimously adopted the committee’s recommendations, with amendments, authorising the Lagos State Government to participate in the FAAC Receivables Discounting Programme and proceed with the N200 billion bond issuance.
The approvals are expected to enable the state to finance major projects, including the New Massey Children’s Hospital, Lagos Rail Mass Transit Line, Lagos Island General Hospital, Omu Creek Bridge and other strategic infrastructure projects.
