Lawmakers also approve Lagos State’s participation in the FAAC Receivables Discounting Programme, with funds earmarked for major infrastructure projects
The Lagos State House of Assembly on Thursday approved the state’s request to raise a Lagos N200bn bond and participate in the Federation Account Allocation Committee Receivables Discounting Programme to fund major infrastructure projects across the state.
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The approvals followed the adoption of the report of the Joint Committee on Economic Planning and Budget and Finance during plenary, clearing the way for the state government to access additional financing for priority capital projects.
Presenting the committee’s report, its Chairman, Sa’ad Olumoh, said the panel had carefully reviewed the executive’s requests and found them suitable for legislative approval.
Olumoh said the Commissioner for Finance, Abayomi Oluyomi, told the committee that the Federal Government introduced the FAAC Receivables Discounting Programme following a proposal by the Nigeria Governors’ Forum.
The initiative is designed to allow participating states to access funding for infrastructure development by using anticipated monthly FAAC allocations as the basis for the financing arrangement.
Under the programme, participating states will 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 will then be paid into a sinking fund managed by the Debt Management Office and domiciled with the Central Bank of Nigeria.
According to Olumoh, the arrangement would provide Lagos with immediate liquidity to finance priority capital projects, including legislative quarters and other strategic infrastructure.
The joint committee also recommended approval for the state to raise N200bn through a Series V conventional bond under its existing N1tn Debt and Hybrid Instruments Issuance Programme.
The proposed bond forms part of the state’s broader financing strategy as it seeks to sustain investment in infrastructure amid growing demands on its public finances.
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 argued that the programme could strengthen the state’s revenue profile because it would not attract interest charges.
However, he stressed that the government should clearly identify the projects that would be financed with the proceeds to ensure that the arrangement delivers measurable value to residents.
He also called for transparency in the utilisation of the funds, arguing that the financing should represent a restructuring of funding sources rather than an increase in the state’s overall budgetary burden.
Speaker of the House, Mudashiru Obasa, backed the financing plan, saying responsible borrowing remained necessary for governments seeking to fund capital projects and accelerate infrastructure development.
Obasa also clarified that the proposed bond had been increased to N200bn because of additional funding requirements and was not the result of a computational error.
He assured lawmakers that the utilisation of the funds would remain subject to legislative oversight and approval, with the aim of ensuring accountability and prudent financial management.
Following deliberations, the lawmakers unanimously adopted the joint committee’s recommendations with amendments.
The decision formally authorises the Lagos State Government to participate in the FAAC Receivables Discounting Programme and proceed with the issuance of the N200bn Series V bond.
The additional financing is expected to support several major infrastructure projects across Lagos, including the New Massey Children’s Hospital, the Lagos Rail Mass Transit system, Lagos Island General Hospital and the Omu Creek Bridge.
Other strategic projects are also expected to benefit from the financing arrangements as the state continues to expand its infrastructure network and respond to the demands of its rapidly growing population.
The Assembly’s approval represents a significant step for the government as it seeks to unlock funding for capital development while balancing the need for infrastructure investment with responsible debt management.
The emphasis on legislative oversight and transparency is likely to remain central to the implementation of the financing plan, particularly as lawmakers seek assurances that the funds will be directed towards projects capable of delivering tangible benefits to Lagos residents.
For the state government, the ambitious financing strategy provides an opportunity to accelerate long-delayed infrastructure projects.
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For the Assembly, the challenge will be to ensure that the funds are properly managed and that the projects ultimately deliver the economic and social impact promised to the people.
David Okere is a journalist and contributor to Freelanews.com, covering business, governance, public affairs, and human-interest stories with a commitment to accuracy, balance, and public interest reporting.
