The Anambra State government has disclosed that deductions are still being made from its monthly federal allocation to service loans obtained by previous administrations, including those of former Governors Peter Obi and Willie Obiano.
Commissioner for Finance, Izuchukwu Okafor, made the disclosure while speaking on the Ndi Anambra podcast published by Anambra State New Media on Monday.
Okafor said the administration of Governor Charles Soludo has not obtained any commercial bank loan since it assumed office, but has continued to repay debts inherited from previous governments.
Key Highlights
- Anambra is still servicing loans obtained under former Governors Peter Obi and Willie Obiano.
- Commissioner Izuchukwu Okafor says the Soludo administration has not borrowed from any commercial bank.
- Deductions are made directly from the state’s FAAC allocation before disbursement.
- Okafor says Anambra’s debt has been reduced by more than 83 percent.
- The state’s domestic debt is now described as near-zero.
- Repayments on World Bank and other externally funded loans continue via automatic deductions.
Anambra Still Servicing Inherited Loans
According to him, the deductions are made from the state’s Federation Account Allocation Committee (FAAC) funds before the money gets to the state government.
“It’s on record, you know, that this administration has not borrowed a kobo from any commercial bank since the inception of this administration,” Okafor said.
He added that the loans being serviced included facilities obtained during the administrations of Obi and Obiano.
“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,” the commissioner said.
Speaking during an Arise TV town hall meeting in 2022, Obi said he governed Anambra for eight years without borrowing from any financial institution in Nigeria.
“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,” he had said.
He also claimed that he left money in the state’s coffers after leaving office.
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Soludo Administration Cuts Anambra’s Debt Burden
However, Okafor said the Soludo administration has substantially reduced Anambra’s overall debt burden since taking office.
He claimed that the state’s debt had been reduced by more than 83 percent through repayments and what he described as prudent debt management.
“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 percent as of today,” Okafor said.
The commissioner also said the administration has cleared several inherited domestic obligations, including unpaid contracts, gratuity and pension arrears.
“In terms of, so, our domestic debt as of today is near-zero balance,” he said.
Anambra’s External Debt Obligations
On external debts, Okafor explained that repayments on some foreign-denominated loans were automatically deducted from the state’s federal allocation in line with the terms attached to the facilities.
He specifically mentioned World Bank loans and other externally funded projects for which the state had repayment obligations.
“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.
Okafor further disclosed that the state had recently paid off one of its outstanding debts, which he identified as CAGS.
He said the government’s debt-repayment strategy had created additional fiscal space for the state by reducing inherited obligations. Further details on the state’s fiscal disclosures are available on the Anambra State Government website.
The commissioner said the administration had been able to pay off a backlog of debts inherited from previous governments, “starting from the time of Peter Obi.” For more updates, follow us on X.
