Anambra Still Repaying Loans Borrowed Under Peter Obi – Soludo Govt

The Anambra State Government says it is still making repayments on loans obtained by previous administrations, including those of former governors Peter Obi and Willie Obiano.

The state said the inherited obligations remain part of its financial commitments despite the decision of the Chukwuma Soludo administration not to take fresh commercial bank loans since it came into office.

Commissioner for Finance, Izuchukwu Okafor, disclosed this while speaking on the Ndi Anambra podcast released by the state government’s New Media team.

Okafor used the platform to explain the state’s current financial position and the steps taken by the Soludo administration to reduce its debt burden.

According to him, the government has focused largely on paying existing obligations rather than accumulating new debts.

“It’s on record that this administration has not borrowed a kobo from any commercial bank since the inception of this administration,” he said.

The commissioner explained that the absence of new commercial borrowing does not mean the state has completely stopped making debt payments.

He said funds due to Anambra from the Federation Account Allocation Committee are still being deducted to service loans contracted by earlier administrations.

Okafor specifically linked some of the outstanding obligations to the administrations of Obi and Obiano.

“These loans were borrowed during the time of Peter Obi and Willie Obiano, the past governors,” Okafor said.

The disclosure comes amid continued debate over the financial records of successive administrations in Anambra and the extent to which the state has relied on borrowing to finance projects.

Peter Obi governed Anambra from 2006 to 2013, while Willie Obiano succeeded him and remained in office until 2022. Soludo took over as governor in March 2022.

The current administration has repeatedly presented debt reduction as one of the major areas of its financial policy.

Okafor said the government had made substantial progress in reducing the liabilities it inherited.

He claimed that the overall state debt profile had dropped by more than 83 per cent under the Soludo administration.

“We have been able to manage the state debt very well, that we have brought it down by more than 83 per cent as of today,” Okafor said.

He said the reduction was not limited to conventional loans.

According to him, the government also inherited several domestic financial obligations which had to be addressed alongside existing debt repayments.

These included unpaid contracts, gratuity arrears and pension liabilities.

The commissioner said the administration had been working to settle such obligations while maintaining funding for ongoing government programmes.

He further stated that Anambra’s domestic debt had been brought close to zero after several outstanding liabilities were cleared.

Okafor said the government still has obligations tied to facilities obtained from development institutions.

He explained that some of the loans are structured in a way that allows repayments to be deducted directly from the state’s federal allocations.

“Before they limit Anambra’s own allocation, they will deduct it as such because most of them, World Bank loans and other loans, they committed,” he said.

The commissioner’s explanation also showed that the state’s current financial position cannot be assessed solely by looking at whether the Soludo administration has taken a new commercial loan.

The administration has maintained that it can finance its programmes through internally generated revenue and available public funds without resorting to fresh commercial borrowing.

The governor, a former Central Bank of Nigeria governor, has frequently emphasised fiscal discipline and the need to reduce the cost of servicing debt.

Anambra had also featured prominently in previous debates over state borrowing during Obi’s tenure.

Obi had built a public reputation around conservative financial management and had repeatedly highlighted the savings and investments accumulated by his administration.

However, available debt records have shown that Anambra had outstanding obligations during and after his tenure, including external facilities.

The latest statement from the Soludo administration does not suggest that all the outstanding obligations were obtained directly from commercial banks.

Rather, Okafor pointed to loans and development facilities whose repayment arrangements remain active years after they were contracted.

He also disclosed that the government had recently cleared an obligation referred to as CAGS.

According to him, the repayment has provided additional financial space for the state government.

The commissioner said clearing such liabilities would allow more resources to be directed towards projects and other areas of government spending.