Rating Release
Agusto & Co. hereby affirms the “Aa-“ rating assigned to the Lagos State Government with a stable outlook
The rating expires on 30 September 2024.
Agusto & Co. hereby affirms the “Aa-“ rating assigned to the Lagos State Government (“Lagos”, “the State” or “LASG”). The rating reflects Lagos State’s very strong financial condition evidenced by i) resilient financial flexibility and robust capacity to meet local currency obligations promptly from its internally generated revenue (IGR) which accounted for over 70% of total revenue in the last three years, ii) good and sustainable cash-generating capacity underpinned by growing tax base and efficient collection system, iii) acceptable expenditure profile tilted in favour of capital spending over the last three years and iv) stable political environment elicited by the good working relationship amongst the three tiers of government as well as the success of the recently concluded gubernatorial elections in the State. A rating concern is LASG’s rising stock of public debts, which is somewhat ameliorated by the concessionary rates on a number of them as well as the longer tenors which minimizes the annual debt service burden. In our opinion, Lagos State is one of the few economically viable states in the country that can function independently of the share of centrally distributed funds by the Federal Government of Nigeria.
