The Anambra State Government has disclosed that the administration of Governor Chukwuma Soludo is still servicing debts and loans inherited from past governments, including those of former governors Peter Obi and Willie Obiano.
The State Commissioner for Finance, Izuchukwu Okafor, made this disclosure during a Ndi Anambra podcast uploaded by Anambra State New Media on Monday, while providing a breakdown of the state’s current debt profile under Soludo.
Okafor clarified that the present administration has not borrowed funds from any commercial bank since assuming office, choosing instead to focus on clearing inherited obligations.
“It’s on record, you know, that this administration has not borrowed a kobo from any commercial bank since the inception of this administration,” he stated.
Explaining how deductions are made to clear the foreign loans, the commissioner revealed that payments are automatically deducted monthly from the state’s Federation Account Allocation Committee (FAAC) funds.
“Yes, every month during our FAC meetings, and when you see the schedule of FAC, you will notice there were substantial, significant deductions from our own FAC because of loans previously borrowed by previous administrations,” Okafor said.
He noted that some of these foreign liabilities trace back through multiple past tenures.
“These loans were borrowed, you know, during the time of, even, not the immediate predecessor, even during the time of Peter Obi and Willie Obiano, His Excellency, the past governors,” he added.
Addressing the issue of foreign debt, Okafor explained that specific repayment covenants trigger automatic deductions during federal allocation distributions.
“But following as well, external debts, which is foreign loan-denominated debts, when you look at it, because there are some covenants around the period it will take to pay off these loans, particularly deducted as such when we are doing FAC,” he said.
“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.”
Despite these deductions, the commissioner emphasized that the Soludo administration has achieved massive debt reduction while refraining from taking new loans.
“But I will also say that Mr Governor has not borrowed a penny. We have been able to manage the debt, the state debt, very well, that we have brought it down by more than 83 per cent as of today. I’ve been able to repay back most of these loans,” he said.
He further highlighted that several legacy liabilities, including long-standing domestic arrears, have been cleared to free up financial resources for the state.
“But I will give you an example for our domestic debt, the control, the legacy, what we call legacy debts, you know, the contracts that were not paid, not owing, the gratuity arrears, pension arrears, we’ve been able to clear all that,” he stated.
He added, “In terms of, so, our domestic debt as of today is near-zero balance.”
The commissioner also revealed that specific debt obligations have been fully liquidated recently to optimize state spending power.
“There is one debt that we recently paid off, CAGS,” he said.
“So, in a nutshell, I’ve been able to, you know, create more fiscal space for Anambra State,”
Okafor noted, adding, “This administration has been able to create more by paying off, you know, backlog of numerous debts inherited from previous governments, starting from the time of Peter Obi.”
Meanwhile, former governor Peter Obi had previously addressed claims regarding his administration’s financial record during an Arise TV Town Hall meeting in Abuja in 2022.
“During my time as a former governor, I served for eight years. You can go to that state you will find that I never borrowed from any financial institution in Nigeria,” Obi said.
“I have never borrowed, I served faithfully and I left their money,” Obi added.
