The Anambra State Government has disclosed that it is still servicing loans obtained by previous administrations, including those of former governors Peter Obi and Willie Obiano.
The state Commissioner for Finance, Izuchukwu Okafor, made the disclosure while speaking on the Ndi Anambra podcast released by the state government’s New Media team.
Okafor said the Chukwuma Soludo administration had not obtained any fresh commercial bank loan since assuming office in March 2022, but continues to make repayments on financial obligations inherited from previous governments.
According to him, deductions are being made from funds accruing to Anambra through the Federation Account Allocation Committee to service some of the outstanding loans.
“It’s on record that this administration has not borrowed a kobo from any commercial bank since the inception of this administration,” Okafor said.
The commissioner, however, stressed that the absence of fresh borrowing by the current administration does not mean the state has stopped servicing existing debts.
He said some of the loans being repaid were obtained during 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 Times)
Soludo administration says it inherited financial obligations
Soludo became governor of Anambra State in March 2022 after defeating several candidates in the November 2021 governorship election.
Before him, Obi governed the state from 2006 to 2013, while Obiano succeeded Obi and remained in office until 2022.
The latest disclosure has again drawn attention to the financial obligations inherited by successive administrations in Anambra and the state’s approach to debt management.
The Commissioner for Finance said the present administration had focused on reducing existing liabilities rather than taking on new commercial debt.
He said the government had made significant progress in reducing the state’s debt burden since Soludo assumed office.
According to Okafor, the overall state debt profile has been reduced by more than 83 per cent under the current 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,” he said. (The Times)
The commissioner also said the administration had addressed several domestic liabilities that it inherited when it came into office.
These, he said, included unpaid contracts, gratuity arrears and pension arrears.
Domestic debt said to be near zero
Okafor said the government had substantially cleared Anambra’s domestic obligations.
“In terms of our domestic debt, we’ve been able to clear legacy debts — contracts not paid, gratuity arrears, pension arrears. Today, our domestic debt is near-zero balance,” he said. (The Times)
The statement suggests that the state’s current debt burden consists largely of obligations that have longer repayment arrangements, particularly facilities obtained from development institutions.
The commissioner explained that some of these facilities have repayment structures that allow deductions to be made directly from the state’s federal allocations.
This means that the state government does not necessarily receive the full amount due to it before the agreed debt deductions are made.
FAAC deductions used to service inherited loans
According to Okafor, some of Anambra’s loan agreements contain repayment covenants that allow lenders to recover scheduled payments directly from federal allocations to the state.
He explained that deductions are made before the state’s available allocation is released for other spending.
“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,” the commissioner said. (The Times)
Such arrangements are not unusual for development-related financing obtained by state governments.
They are designed to provide lenders with a predictable repayment mechanism over the duration of a loan.
For Anambra, however, the deductions mean that part of the state’s monthly federal revenue remains committed to servicing obligations incurred by previous administrations.
World Bank facilities remain among obligations
The finance commissioner also referred to loans obtained from development institutions, including World Bank-related facilities.
He explained that some of the obligations remain active because they were structured for repayment over a period extending beyond the tenure of the administration that contracted them.
This is an important distinction in assessing Anambra’s debt position.
The fact that a current government is making repayments does not necessarily mean the current administration contracted the loan.
State governments routinely inherit both assets and liabilities from previous administrations, with repayment schedules often continuing for years after the administration that obtained the facility has left office.
The state’s latest position is therefore that the Soludo administration is servicing inherited obligations while refraining from fresh commercial borrowing.
CAGS debt reportedly cleared
Okafor also disclosed that the state had recently cleared an obligation referred to as CAGS.
According to him, settling the debt has created additional financial space for the government.
He said the clearance of inherited liabilities would enable the administration to direct more resources towards development projects and other government priorities. (The Times)
The commissioner did not suggest that all of Anambra’s outstanding obligations had been eliminated.
Rather, he presented the debt reduction as part of a broader strategy to improve the state’s fiscal position.
What the statement means for Peter Obi
The latest disclosure is significant because Peter Obi has frequently highlighted his administration’s approach to fiscal management while serving as Anambra governor.
Obi was governor between 2006 and 2013 and has, over the years, spoken publicly about the financial position he left behind.
The Soludo administration’s latest statement does not, by itself, establish that Obi personally took every loan currently being repaid by Anambra.
Rather, the commissioner specifically said that some of the loans being serviced were obtained during the administrations of Obi and Obiano.
It is therefore important to distinguish between loans contracted during an administration and broader claims about an individual governor’s personal borrowing or financial management.
The latest statement also does not establish that all of Anambra’s current liabilities originated under Obi.
Some obligations were contracted under later administrations, including that of Obiano, while others may have repayment periods extending across multiple administrations.
Obi and Obiano administrations
Obi governed Anambra from 2006 until 2013 before handing over to Obiano.
Obiano subsequently governed the state from 2014 to 2022.
The Soludo administration inherited the state’s financial obligations when it assumed office in March 2022.
The latest comments from the Commissioner for Finance therefore place the current debt debate within a broader timeline involving several successive governments.
Rather than attributing the state’s entire debt position to one former governor, the commissioner’s statement specifically identified loans from the Obi and Obiano periods among the obligations still being serviced.
Soludo says his government has not taken commercial loans
One of the central points in Okafor’s statement was that the Soludo administration has not borrowed from commercial banks since it came into office.
This position is being presented by the state government as evidence of its commitment to reducing debt accumulation.
The administration has instead focused on internally generated revenue, federal allocations and other available resources to finance government activities and settle inherited obligations.
The finance commissioner said the approach had allowed the state to reduce its liabilities significantly.
However, the state still has outstanding obligations because some development loans have long repayment periods.
Debt reduction remains a key fiscal issue
Debt management has become an increasingly important issue for state governments across Nigeria as administrations attempt to balance infrastructure spending with rising recurrent expenditure and debt-servicing obligations.
For states with loans backed by federal allocations, deductions can directly affect the amount of money available for monthly government spending.
This makes the ability to increase internally generated revenue particularly important.
For Anambra, the Soludo administration has repeatedly emphasised revenue generation and fiscal discipline as key elements of its economic policy.
The government has also sought to clear legacy liabilities while continuing to finance infrastructure and other public projects.
Anambra’s debt position requires context
The latest statement should also be considered alongside official debt documents rather than viewed solely through political arguments between current and former administrations.
Anambra’s debt sustainability and debt management documents provide information on the state’s borrowing obligations and repayment arrangements. (Anambra State Government)
Debt figures can also change over time as governments make repayments, obtain new facilities, settle arrears or renegotiate existing obligations.
Consequently, the amount owed at any particular time may differ significantly from the amount originally borrowed.
This is particularly relevant for loans obtained from development institutions, which are often structured over several years.
Political implications
The disclosure is likely to attract political attention because Peter Obi remains one of Nigeria’s most prominent political figures.
Obi, who was the Labour Party’s presidential candidate in the 2023 election, continues to feature prominently in national political discussions.
His record as Anambra governor is frequently cited by supporters and critics in debates over governance, debt management, savings and public investment.
The latest statement from the Soludo administration could therefore generate renewed debate over the financial legacy of Obi’s tenure.
However, the available statement from the state government does not amount to a comprehensive audit of Obi’s eight years in office.
It is specifically a disclosure by the current Finance Commissioner concerning loans that remain under repayment and the administration’s broader debt-reduction efforts.
Government says debt burden has fallen
The Soludo administration’s main argument is that it inherited significant financial obligations but has reduced the overall burden by more than 83 per cent, according to the Commissioner for Finance.
It also says it has cleared several domestic liabilities, including unpaid contracts, gratuities and pension arrears.
At the same time, some external and development-related facilities remain under repayment.
The government has stressed that these obligations are being serviced without the need for fresh commercial borrowing.
What happens next
The continued repayment of inherited loans means debt servicing will remain part of Anambra’s financial commitments for as long as the outstanding facilities remain active.
The state’s ability to maintain its debt-reduction strategy will depend on revenue generation, federal allocations, expenditure management and the repayment schedules attached to existing facilities.
The government is also expected to continue settling inherited liabilities while financing infrastructure and other public programmes.
For now, the latest disclosure has placed the financial records of previous administrations back in the spotlight.
The key fact established by the latest statement is that Anambra is still servicing some loans contracted during the administrations of Peter Obi and Willie Obiano, while the Soludo administration maintains that it has not obtained a new commercial bank loan since taking office.
The state government also says it has reduced its overall debt burden by more than 83 per cent and brought domestic debt close to zero.
The claims are likely to remain part of the political and economic debate surrounding Anambra’s past and present financial management.
