Lagos State is preparing to launch one of Africa’s most ambitious sub-national financing initiatives, introducing an asset securitisation model aimed at revolutionising how governments mobilise capital for development projects.
In an interview, Finance Commissioner Abayomi Oluyomi explained that the approach represents a significant shift in strategy, enabling the state to attract private investment, unlock dormant assets, and accelerate economic growth.
According to Oluyomi, Lagos requires as much as N20 trillion to finance infrastructure and remain competitive as a modern megacity. Traditional budget allocations and borrowing strategies, he said, are no longer sufficient to meet the scale of the state’s needs.
He revealed that over 300 state-owned assets have already been identified and categorised for the programme. These assets will be packaged into investment portfolios and sold to investors through a Special Purpose Vehicle (SPV), allowing Lagos to raise capital without assuming direct debt obligations, thus safeguarding its fiscal sustainability.
The initiative also includes the potential for tokenisation, opening up opportunities for digital and fractional investments, enabling ordinary residents to participate in government-backed projects. Analysts predict that a securitisation programme of this magnitude could deepen Nigeria’s financial markets.
While securitisation is not new in Nigeria, it has mostly been used by private companies and federal agencies. Lagos’ adoption marks a major milestone, potentially fostering innovative financial products, broadening participation from retail and institutional investors, and redefining public engagement in funding government projects.
The state anticipates that this model could serve as a template for other sub-national governments across Nigeria and Africa, many of which face similar challenges such as rapid population growth, rising infrastructure deficits, and limited fiscal resources. Lagos has a history of pioneering financial innovation, including its N14.8 billion Green Bond—the first sub-sovereign climate impact bond in Africa—and an oversubscribed N230 billion bond issuance.
Oluyomi emphasised that the benefits go beyond large-scale infrastructure. By securitising major capital projects, the state can redirect budget resources toward supporting MSMEs, youth entrepreneurship, skills development, and trader-focused initiatives. Dormant state assets such as idle lands, old buildings, and abandoned structures will be transformed into logistics hubs, technology parks, and commercial centres through private-sector partnerships.
Flagship projects like the Fourth Mainland Bridge are expected to benefit from the liquidity unlocked by the securitisation process.
However, Oluyomi cautioned that such a large-scale programme requires strict regulatory and governance oversight, including clear asset documentation, robust legal frameworks, bankruptcy provisions, credit enhancements, and independent ratings from SEC-approved agencies. Transparency, he stressed, is essential to maintaining market confidence.
He predicted that securitisation would become a mainstream financing tool for sub-national governments beyond 2026, driving new asset-backed products, greater investor participation, and a more diversified financial system. “The biggest lesson is to think creatively and leverage every possible resource,” Oluyomi concluded.
