LAGOS (Reuters) – Nigeria’s commercial hub, Lagos State, has redeemed 57.5 billion naira ($183 million) worth of local currency bonds it issued seven years ago, it said on Tuesday. 

Finance Commissioner Akinwunmi Ashade said the state was paying off its debts to create space for new issuance to raise funds for infrastructure investment. He said the state has saved more than 103 billion naira in a sinking fund to redeem bonds maturing in 2019, 2020 and 2023.

Lagos State, which accounts for around a third of Nigeria’s economic output, sold the bonds in 2010 to fund badly-needed infrastructure projects, Ashade said.

Nigeria is in its second year of a recession brought on by lower oil prices, which have slashed government revenues, weakened the currency and caused dollar shortages, frustrating business and households.

Finance Minister Kemi Adeosun has said the government needs to invest in infrastructure as a way to spur economic growth.

The state government redeemed 167.5 billion naira in bonds last year.

($1 = 314.50 naira)

(Reporting by Oludare Mayowa; Editing by Chijioke Ohuocha and Catherine Evans)