A total of 13 states raised N346bn revenue from bonds between 2013 and 2017, data obtained from the Securities and Exchange Commission showed. An analysis of the data revealed that Lagos State Government topped the list with a total of N231.9bn. The state in 2013 issued N87.5bn series 2 bond under its N167.5bn debt issuance programme at 13.50 per cent interest rate.
SEC said Lagos State backed the bond issuance with an Irrevocable Standing Payment Order of N300m monthly and Internally-Generated Revenue. The state said proceed from the bond issuance was used for infrastructure developments such as roads, rail, buildings and bridges, health facilities, the construction of Adiyan water project phase II and shoreline protection work.
The bond, which was fully subscribed to, is due for repayment in 2020. In 2016, Lagos State issued another N47bn series 1 seven-year fixed rate bond under its N500bn debt issuance programme. The bond offered at 16.50 per cent was fully subscribed. Lagos State Government said the proceeds were used to execute priority projects in the health and education sectors and for the channelisation of water transport routes.
It added that the proceed was also used for the construction and completion of roads, flyover projects, the Lagos enterprise GI upgrade and integrated land administrative and automation system project. The projects are still ongoing and the bond is due for repayment in 2023.
In 2017, four new bonds were issued by the Lagos State Government for the same projects. The first bond worth N46.37bn was issued as the second series and first tranche of its N500bn debt issuance programme at 16.75 per cent interest rate.
The second was N38.77bn bond issued at 17.25 per cent under the series II tranche II of its N500bn debt issuance programme. The third was N6.9bn bond issued at 15.60 per cent under the series II tranche III of its N500bn debt issuance programme. The fourth bond worth N5.34bn was issued at 15.85 per cent under the series II tranche IV of its N500bn debt issuance programme.
The four bonds would be due for repayment in 2024, 2027, 2024 and 2027, respectively. In 2013, Ekiti State Government issued a N5bn series 1 bond due 2020 under its N25bn debt issuance programme. It said the funds were used for the construction of roads, bridges, rehabilitation of Ire burnt bricks and the construction of the Ekiti-Kete pavilion.
Kogi State Government also issued a N5bn series 1 bond due 2020 under its N20bn debt issuance programme. It said the bond proceed was used to finance infrastructure projects such as water works, housing units, multi-lane carriage way, construction of hospitals, development of Kogi House in the Federal Capital Territory and the development of modern motor parks.
In 2015, the state issued another N3bn series II bond under its N20bn debt issuance programme to be used for financing projects. Niger State Government issued a N12bn series 1 bond in 2013 under its N21bn medium-term note programme.
It stated that it used the proceeds for the construction of roads, completion of the Shiroro Bridge, development of the Garam site and services scheme and construction of an international market.
Osun State, through the Osun Sukuk Company Plc, issued a N11.4bn bond in 2013, saying the Al-Ijara Tranche 11 was under the state government’s N60bn debt issuance programme. It said it utilised the funds for the construction of millennium model schools (elementary, middle and high schools).
Bauchi State Government in 2014 issued a N15bn series 1 bond under its N30bn debt issuance programme. It noted that the proceeds were used for part financing of Bauchi Specialist Hospital, the completion of Sir Abubakar Tafawa Balewa international airport and the refinancing of bank loans.
Nassarawa State Government issued a N5bn bond in 2014, which it said was under the N20bn MTN Programme. It added that the funds were used for various developmental and infrastructural projects of the state such as the education project (hostel expansion) and market development project (complete construction).
In 2015, Benue, Cross River, Gombe, Oyo, Plateau and Zamfara states issued bonds worth N4.95bn, N8bn, N5bn, N4.8bn, N28.2bn and N7bn, respectively.