LAGOS State’s N200 billion bond issuance has closed with a 55 percent oversubscription, attracting strong demand from domestic investors. Its N14.8 billion Green Bond also drew nearly twice the offer size.

The N200 billion conventional bond, which is the largest ever issued by a non-corporate sub-national in Nigeria, received commitments totalling N308 billion. The green bond secured N28.7 billion in bids, representing a 94 percent oversubscription. Both outcomes reinforced Lagos’ dominance in Nigeria’s sub-national debt market.

Lagos remains the only sub-national government in Nigeria to issue an impact-focused climate bond, and the latest result further signals investor faith at a time when many states face shrinking access to long-term financing.

Lagos State Governor, Mr Babajide Sanwo-Olu, said the performance reflects renewed confidence in the country’s economic trajectory and the impact of ongoing macroeconomic reforms.

“This is a reflection of global confidence in Nigeria’s economy, fostered by the bold reforms initiated by President Bola Ahmed Tinubu, as seen in the oversubscription of the Federal Government’s recent Eurobond,” Mr Sanwo-Olu said.

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He noted that Lagos’ strong outing underscores its resilience and the consistent backing of private-sector partners, reaffirming the administration’s commitment to prudent financial management and fiscal transparency.

Proceeds from the issuance will be channeled into priority projects under the THEMES+ Agenda, with a focus on transport, healthcare, education and environmental sustainability. The state expects these investments to improve living standards for its more than 20 million residents and advance its ambition to become a global financial hub.

The outcome could set new benchmarks for sub-national issuances as demand for green and climate-linked instruments continues to rise among institutional investors. However, it also raises the state’s debt stock.

Domestic debt under Governor Babajide Sanwo-Olu of Lagos has risen by 117 percent in six years, jumping from N479.047 billion before he came to office in 2019 to N1.0049 trillion six years later.

According to Economy Post‘s computation from data complied by the Debt Management Office (DMO), Governor Sanwo-Olu has borrowed N562.309 billion so far since 2019 when he became the chief executive officer of the nation’s economic capital.

The state’s domestic debt is rising at a point its revenues are skyrocketing. As of 2018 – one year before Mr Sanwo-Olu came to office – Lagos State’s internally generated revenue (IGR) stood at N382.1 billion, according to the National Bureau of Statistics (NBS). Fast-forward to 2024, the state generated N1.3 trillion in IGR, marking a 45 percent increase from N895 billion in 2023.

By implication, Mr Sanwo-Olu has raised the IGR of the nation’s economic capital by 240.31 percent in six years. Also, the government has shown some restraint by reducing its exposure to external debt.

He met an external debt of $1.421 billion in 2019 and reduced it to $1.049 billion, representing a 26 percent fall in foreign debt.

Lagos growing rail infrastructure

Lagos State under Sanwo-Olu has initiated a rallway revolution. The first phase of the Blue Line covers Marina to Mile 2. The second phase, which is still under construction, covers Mile 2 to Okokomaiko and is expected to be completed in 2026.

The Red Line traverses Agbado to Oyigbo, with 8 stations. It has commenced operations and the phase 2 will be extended to Marina. Lagos also plans the Green Line, which will cover Victoria Island to Ajah. There is also the anticipated Purple Line, which is expected to traverse Redemption Camp to Ojo.

“It can be said that Lagos State’s rail revolution under Governor Sanwo-Olu is solid and we are excited about that,” said Lagos-based engineer, Mr Adebayo Adeyinka. “We now want the revolution to now move to roads, especially those at the countryside.”

Leakages persist

In spite of the revenue spike, Lagos records huge leakages. The 2022 Internally Generated Revenue By States report released by the NBS showed that Nigeria’s richest state realised nothing from road taxes, even when not-so-buoyant Niger and Plateau made N408.8 million and N642.3 million respectively from the same source.

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This reporter had carried out a data-driven investigation in 2021, which revealed that Lagos makes N123.078 billion from road/ transport taxes every year. The story, published by The ICIR and Economy Post, was entitled, ‘Money for the boys: How agberos pocket billions of Lagos transport revenue.

It revealed that Lagos generates N82.1 billion annually from 75,000 commercial buses in the state while earning N32.9 billion from 50,000 tricycles within the same period.

The report showed that the state realises N8.1 billion from 37,000 motorcycles each year. Even with the ban on motorcycles, Lagos still earns more than N100 billion from taxes collected from commercial vehicles and tricycles in various local governments and local council development areas.

However, the money goes into private pockets of touts and hoodlums in the state, who provide zero accountability for the money while the state watches on.

The reporter had sent a Freedom of Information (FOI) request to the then Executive Chairman of the Lagos State Internal Revenue Service (LIRS), Mr Hamzat Ayodele Subair, requesting details of transport revenue in Lagos between 2015 and 2019, but he did not reply.

Text and WhatsApp messages were sent to the Lagos State Commissioner of Finance, Mr Rabiu Olowo, asking him for relevant information on road and transport taxes, but he did not reply.

Road and transport taxes were not found in Lagos State’s 2015-2022 financial statements examined by the reporter.

Mr Musiliu Akinsanya, fondly called MC Oluomo, heads a group that collects road taxes in Lagos. A wealthy man, Mr Akinsanya is the acting Chairman of the National Union of Road Transport Workers (NURTW) in Zone 2, South West Nigeria.