Lagos Assembly Approves ₦200bn Bond, FAAC Financing Plan for Infrastructure Projects

The Lagos State House of Assembly has approved the state government's request to issue a ₦200 billion bond and participate in the Federation Account Allocation Committee (FAAC) Receivables Discounting Programme to support major infrastructure projects across the state. The approvals were granted after lawmakers adopted the report of the Joint Committee on Economic Planning and Budget and Finance during Thursday's plenary session. Presenting the committee's report, Chairman Sa'ad Olumoh said the proposals were thoroughly reviewed and found suitable for legislative approval. He explained that the Commissioner for Finance, Abayomi Oluyomi, informed the committee that the FAAC Receivables Discounting Programme was introduced by the Federal Government following a proposal by the Nigeria Governors' Forum to help states access funding for capital development. Under the arrangement, participating states will authorise deductions from their monthly FAAC allocations through an Irrevocable Standing Payment Order (ISPO). The deductions will be paid into a sinking fund managed by the Debt Management Office (DMO) and domiciled with the Central Bank of Nigeria (CBN). Lawmakers said the programme would provide Lagos with immediate funds to execute key infrastructure projects, including legislative quarters and other strategic developments. The Assembly also approved the state's plan to raise ₦200 billion through a Series V conventional bond under its existing ₦1 trillion Debt and Hybrid Instruments Issuance Programme. During the debate, Chairman of the House Committee on Waterfront Infrastructure, Gbolahan Yishawu, described the FAAC initiative as an advance funding arrangement rather than a conventional loan because it does not attract interest. He, however, called for greater transparency and urged the government to clearly identify the projects that would benefit from the funding. Speaker of the House, Mudashiru Obasa, defended the borrowing plan, stating that responsible borrowing remains necessary to finance critical infrastructure and support the state's development agenda. He added that the increase in the proposed bond value reflected additional funding needs and assured that the use of the funds would remain subject to legislative oversight. The approved financing is expected to support projects such as the New Massey Children's Hospital, the Lagos Rail Mass Transit Line, Lagos Island General Hospital, Omu Creek Bridge, and other strategic infrastructure across the state.