Lagos Assembly clarifies its position on the conversion of $53.9 million LCC loan

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The Lagos House of Assembly has said that it only approved the request of Governor Babajide Sanwo-Olu to convert the $53.9 million Lagos Concession Company (LCC) private loan to a public sector loan. 

The clarification from the legislature follows media report that they have approved the full takeover of LCC, a privately owned company. 

This was made known by the Chairman House Committee on Finance, Mr Rotimi Olowo (Shomolu Constituency 1), on Thursday in Lagos. 

According to NAN, Olowo told journalists that the clarification became necessary as the loan conversion was to attract lower interest rates from the present 4.2% to 1.2% from the African Development Bank (AfDB). 

He explained that the state government took over the company in 2014 to develop infrastructure in the Epe axis, considering the future establishment of Dangote Refinery, amongst others, which was expected to create employment opportunities and bring in more taxes. 

What the Lagos State lawmaker is saying

Rotimi Olowu said that the terms of the $53.9 million loan agreement were on 75% shareholding by the state government and 25% by Public Private Partnership (PPP). 

He said: “Presently, the government owns LCC 100 per cent since 2014, but the government decided to take over the company due to its economic advantage in the near future. 

“The loan was initially taken as a private sector loan at an interest rate of 4.2 per cent but that it was renegotiated to 1.2 per cent interest rate as a public sector loan. thus requiring approval of of the state House of Assembly. 

“The new repayment period of the loan was based on the ownership structure that has been extended to 2034 so as to reduce pressure of repayment of loan on the state government. 

“The approval by the assembly indicated that out of the $53.9 million loan, $20.1 million with interest rate of $40 million has been paid so far and there is still outstanding loan balance of $27.5million.” 

He said that AfDB granted international component of the loan, while Zenith, United Bank of Africa and First City Monument Bank, granted the local loan.  

What you should know

Nairametrics had earlier reported that the Lagos State Assembly House Committee on Finance, in its presentation during plenary, approved the full takeover of ownership of Lekki Concession Company (LCC) by the state government. 

But, in its reaction, the Lagos State Commissioner for Information, Mr Gbenga Omotosho, debunked the report, saying that the request by the governor was not to takeover LCC since it had already been done in 2014. 

The commissioner added that the request was to convert the loan to a public sector facility. 

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