The Anambra State Government has said the administration of Governor Chukwuma Soludo is still servicing loans and other debts incurred by previous administrations, including those of former governors Peter Obi and Willie Obiano.
The Commissioner for Finance, Izuchukwu Okafor, disclosed this during a Ndi Anambra podcast uploaded by Anambra State New Media on Monday while explaining the state’s debt position under the Soludo administration.
Okafor said the current administration had not borrowed from any commercial bank since taking office but had continued to service loans inherited from previous governments.
“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.
He explained that deductions were made from the state’s Federation Account Allocation Committee funds every month to service loans obtained by previous administrations.
“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 said some of the loans were 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, His Excellency, the past governors,” he said.
Okafor, however, said the Soludo administration had significantly reduced the state’s debt burden while also clearing several inherited domestic obligations.
“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.
The commissioner said the administration had also cleared several legacy debts, including unpaid contracts, gratuity arrears 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.
He added, “In terms of our domestic debt as of today is near-zero balance.”
On the state’s external debts, Okafor said some repayments were automatically deducted from federal allocations because of the terms attached to 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 also disclosed that the state had recently paid off one of its debts.
“There is one debt that we recently paid off, CAGS,” he said.
He said the administration’s debt-management strategy had created more fiscal space for the state.
“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.”
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