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| How to balance the books! Lagos insures infrastructures for N133bn against Boko Haram |
With barely few days remaining before the end of his administration, Governor Babatunde Fashola of Lagos State has devised a means to balance and re-calibrate public funds. The Lagos State Government today announced that it has has decided to insure infrastructures in the state against Boko Haram and natural disasters to the tune of N133 billion. The account must surely balance one way or the other - even if it means panel-beating it into shape. It is called retirement of funds.
According to vanguard Lagos State stated that it insured the Lekki-Ikoyi Link Bridge, roads and other important state-owned infrastructures for N133 billion against terrorists attack and natural disasters.
This was disclosed by the Commissioner for Finance, Mr. Ayo Gbeleyi.
According to him, “Strategic assets such as bridges, drainage channels and roads are now specifically insured against natural disasters and terrorist attacks, amongst others.”yi while speaking on the financial activities of the state government in the last one year.
“This action is for the benefit of the residents of Lagos State. This is under the special risk cover against disaster and terrorism. The premium is N247 million for the year and that insures an asset of about N133 billion of the state,” he added.
A breakdown of the insured infrastructures revealed that the cable bridge, Lekki-Ikoyi Link Bridge, was insured for N35 billion.
Explaining the insurance scheme, Gbeleyi said “You need to remember that in insurance, we tried to cover the replacement cost. Often times, we aren’t dealing with the historical cost of construction (N29 billion).
"We are looking at, God forbids, if we have a situation with the bridge. How much will it cost to reinstate it? And that is the figure that I have given you as the insured value of the Lekki-Ikoyi Link Bridge.”
The commissioner noted that this was part of the restructured and optimised Insurance Risk programme of the state which in scope serve as cover for critical assets and staffs of the state.
On why Lagos rating dropped
Gbeleyi also explained the drop in the state’s Fitch rating.
According to him; “On April first, Fitch rating agency slightly reduced the state’s rating in terms of outlook from BB minus stable it was until March 31st, 2015 to BB minus negative.
‘’The rating of any sub-national body will normally trail the rating of the country. The moment the rating agency downgraded the country’s rating, from stable to negative. It is only natural that any sub-national organisation will take a cue from that. The state’s rating is tied to national rating,” he said.
I am sure disillusioned 'Lagosians' are clapping their hands without taking stock and asking if their future has also been insured?
Despite the huge revenue the Lagos State generates, it is heading for bankruptcy due to the continued pilfering of its governors, with current debts accruing to whooping $2.6 billion. State is the most indebted State in Nigeria with official local and foreign debts of over N512 billion comprising local debts of N278.8 billion (DMO December 2013) and foreign debts of $1. 169 billion or N234 billion (DMO December 2014).
This was disclosed by the Commissioner for Finance, Mr. Ayo Gbeleyi.
According to him, “Strategic assets such as bridges, drainage channels and roads are now specifically insured against natural disasters and terrorist attacks, amongst others.”yi while speaking on the financial activities of the state government in the last one year.
“This action is for the benefit of the residents of Lagos State. This is under the special risk cover against disaster and terrorism. The premium is N247 million for the year and that insures an asset of about N133 billion of the state,” he added.
A breakdown of the insured infrastructures revealed that the cable bridge, Lekki-Ikoyi Link Bridge, was insured for N35 billion.
Explaining the insurance scheme, Gbeleyi said “You need to remember that in insurance, we tried to cover the replacement cost. Often times, we aren’t dealing with the historical cost of construction (N29 billion).
"We are looking at, God forbids, if we have a situation with the bridge. How much will it cost to reinstate it? And that is the figure that I have given you as the insured value of the Lekki-Ikoyi Link Bridge.”
The commissioner noted that this was part of the restructured and optimised Insurance Risk programme of the state which in scope serve as cover for critical assets and staffs of the state.
On why Lagos rating dropped
Gbeleyi also explained the drop in the state’s Fitch rating.
According to him; “On April first, Fitch rating agency slightly reduced the state’s rating in terms of outlook from BB minus stable it was until March 31st, 2015 to BB minus negative.
‘’The rating of any sub-national body will normally trail the rating of the country. The moment the rating agency downgraded the country’s rating, from stable to negative. It is only natural that any sub-national organisation will take a cue from that. The state’s rating is tied to national rating,” he said.
I am sure disillusioned 'Lagosians' are clapping their hands without taking stock and asking if their future has also been insured?
Despite the huge revenue the Lagos State generates, it is heading for bankruptcy due to the continued pilfering of its governors, with current debts accruing to whooping $2.6 billion. State is the most indebted State in Nigeria with official local and foreign debts of over N512 billion comprising local debts of N278.8 billion (DMO December 2013) and foreign debts of $1. 169 billion or N234 billion (DMO December 2014).
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