The Anambra State Government says it is still repaying loans inherited from previous administrations, including those of former governors Peter Obi and Willie Obiano, despite the Chukwuma Soludo administration not taking any commercial bank loan since assuming office.
The state Commissioner for Finance, Izuchukwu Okafor, disclosed this during a Ndi Anambra podcast uploaded by Anambra State New Media on Monday.
Okafor said the government had continued to meet its repayment obligations on debts incurred by earlier administrations, with deductions made from the state’s monthly Federation Account Allocation Committee funds.
“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 said.
Explaining the deductions, the commissioner said, “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.
According to him, some of the outstanding loans dated back to 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, His Excellency, the past governors,” he said.
Despite the inherited obligations, Okafor said the Soludo administration had succeeded in reducing Anambra’s overall debt burden by more than 83 per cent.
“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 said the administration had also settled several domestic liabilities accumulated by previous governments, including unpaid contracts, gratuity and pension arrears.
“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 said.
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He added, “In terms of, so, our domestic debt as of today is near-zero balance.”
On foreign-denominated obligations, Okafor explained that repayments were deducted directly from federal allocations under the terms attached to some of the loans.
“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.”
The commissioner further disclosed that the state had recently completed repayment of one of its debts.
“There is one debt that we recently paid off, CAGS,” he said.
According to Okafor, the administration’s approach to managing the state’s liabilities had helped increase the funds available for government activities.
“So, in a nutshell, I’ve been able to, you know, create more fiscal space for Anambra State,” Okafor said.
He added, “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.”
However, Obi, who later became the presidential candidate of the Labour Party, had in 2022 said he did not borrow from any financial institution while serving as Anambra governor.
Speaking at an Arise TV Town Hall meeting in Abuja, Obi said, “During my time as a former governor, I served for eight eights. You can go to that state you will find that I never borrowed from any financial institution in Nigeria.”
He also said, “I have never borrowed, I served faithfully and I left their money.”