Nigeria’s Lagos state plans to sell a third series of infrastructure bonds next year, raising 60 billion naira ($396 million) in funds needed to support expansion in one of the fastest growing cities in the world.
The sale still needs regulatory approval, said Ben Akabueze, the state’s commission for economic planning and budget, in an interview in Abuja, the capital, today. He didn’t say what the coupon rate would be.
Lagos, the commercial capital of Africa’s top oil producer, is upgrading roads, railways and bridges to cope with a growing population, currently estimated at around 17 million people, according to the World Bank. State Governor Babatunde Fashola said in March the city is planning a new urban rail system, a free-trade zone and expansion of a highway to neighboring Benin.
The state sold 50 billion in five-year bonds in 2008 and a sale of seven-year notes worth the same amount in April as part of plans to raise a total of 275 billion naira in different tranches.
“They’re in pole position in terms of capacity to pay back because they generate a lot of income outside of the federal government allocation,” said Pabina Yinkere, an analyst at Lagos-based fund manager Vetiva Capital Management Ltd. The state is one of the few in the country that generates revenue internally, Yinkere said.
Lagos is home to Nigeria’s biggest companies, including Nigeria Breweries Plc and Dangote Group. The country’s main stock exchange is also based in the Atlantic ocean-side city.