The Anambra State Government says it is still servicing loans obtained by previous administrations, including those of former governors Peter Obi and Willie Obiano, with repayments deducted from the state’s monthly federal allocation.
The claim was made by Anambra State Commissioner for Finance, Izuchukwu Okafor, during an appearance on the Voice of Ndi Anambra Podcast. The comments have reopened a long-running political dispute over the state’s finances when Obi left office in 2014 and the debt obligations subsequently inherited by successive administrations.
According to Okafor, the deductions are reflected in the monthly Federation Account Allocation Committee (FAAC) statements and continue to reduce the amount of money available to the state.
“Every month during our FAAC meetings,” Okafor said, the schedules show “substantial, significant deductions” from Anambra’s allocation because of loans previously borrowed by past administrations.
He specifically identified the administrations of Obi and Obiano among those whose loans are still being serviced, while noting that other previous governors also incurred financial obligations on behalf of the state.
Soludo Government Says It Has Not Taken Commercial Bank Loans
Okafor said the administration of Governor Chukwuma Soludo has not borrowed from any commercial bank since taking office.
He said the government has instead concentrated on paying down obligations inherited from previous administrations.
“It’s on record,” Okafor said, “that this administration has not borrowed a kobo from any commercial bank since the inception of this administration.”
The commissioner claimed that Anambra’s overall debt has been reduced by more than 83 per cent under Soludo.
He also said the government had cleared most of the state’s domestic liabilities, including outstanding obligations relating to unpaid contracts, gratuities and pensions.
According to him, Anambra’s domestic debt position is now at a near-zero balance, although deductions associated with inherited loans continue to be made from federal allocations.
The distinction is important because the government's position is not that Soludo's administration recently accumulated the debts in question. Rather, it says the state continues to service financial obligations inherited from previous administrations.
How the Loan Repayments Affect Anambra’s Revenue
Okafor explained that some of the loans were structured in a way that allows repayment to be deducted from federal allocations before the state's funds are transferred.
That means Anambra does not receive the full amount of its monthly allocation whenever applicable debt-service deductions are made.
The commissioner said the deductions have a direct effect on the resources available to the state for other expenditures.
He also referred to World Bank-related loans and other obligations for which repayment arrangements had already been established.
“Before they remit Anambra’s own allocation, they will deduct it as such,” Okafor said, explaining that some of the loans had been committed under arrangements involving development financing.
Such deductions are not necessarily evidence of default or financial distress. Government loans can be structured to allow repayment from statutory allocations over a specified period. The key issue is therefore the amount still outstanding, the original purpose of each loan and whether the obligations were properly incurred and serviced.
Commissioner Says Debt Reduction Has Been a Priority
The finance commissioner said the Soludo administration has focused on reducing the state's inherited financial burden.
He said the government has paid off a substantial portion of the loans and other liabilities inherited from previous administrations.
Okafor also said the government had recently cleared another outstanding debt as part of its effort to reduce the obligations accumulated over several years.
He described the exercise as part of a broader effort to address liabilities dating back to previous administrations, including the period when Obi governed the state.
The claim comes at a politically significant moment, with Obi now preparing for the 2027 presidential election and Soludo's administration continuing to defend its record in Anambra.
The issue of how much debt Obi inherited, incurred or left behind has been a recurring point of political debate.
Peter Obi Rejects the Claim
Obi has rejected the suggestion that he left Anambra with unpaid financial obligations.
Responding after the comments by the state government, the former governor said he had settled what was due before leaving office.
Obi said that when he handed over power, he was not owing salaries, pensions, gratuities or contractors who had completed their work and whose documents had been processed.
He also challenged anyone who had evidence contradicting his account to produce it.
The former governor further said he left money belonging to the state in a First Bank account before handing over power.
According to Obi, the account contained approximately ₦2.1 billion in an ecological fund that had been received from the Federal Government for a specific erosion-control project.
He said the money was not spent before his departure because he wanted the incoming administration to continue the project.
Obi said the funds had been received roughly three months before he left office and were therefore reserved for the designated purpose.
He challenged anyone who found evidence that the account did not contain the money at the time he left office to make that evidence public.
Obi went further by saying he would stop his 2027 presidential campaign if evidence emerged showing that his account of the funds was incorrect.
A Long-Running Dispute Over Anambra’s Finances
The latest exchange is part of a broader disagreement between Obi and Soludo that has persisted since Soludo became governor.
Obi governed Anambra from 2006 to 2014, while Obiano succeeded him and served until 2022. Soludo took office in March 2022.
The three administrations therefore represent different periods in the state's recent financial history, and financial obligations can extend across several administrations depending on the repayment terms attached to loans.
The Anambra government's latest position is that some loans currently being serviced were contracted during Obi's and Obiano's administrations.
Obi's position is different: he maintains that he left office without outstanding obligations of the kind described by the current government and says financial records should be used to establish the facts.
The disagreement highlights an important distinction between loans contracted during an administration and unpaid liabilities left by that administration.
A government can borrow money for a project and remain fully up to date on repayment obligations when it leaves office. The succeeding government then inherits the loan and continues making scheduled repayments even though the borrowing itself was not necessarily in default.
For that reason, the fact that Anambra is still making repayments does not by itself establish that Obi or Obiano left the state in financial default.
What remains central to the dispute is the identity of the loans, when they were contracted, their original values, their repayment schedules, the projects they financed and the amounts still outstanding.
Why the Issue Matters
The debate is significant beyond the political rivalry between Obi and Soludo because debt servicing directly affects the resources available to state governments.
When a portion of a state's federal allocation is deducted to repay loans, the remaining funds must cover salaries, infrastructure, healthcare, education, security, pensions and other government responsibilities.
At the same time, borrowing can provide governments with funds to finance infrastructure and other projects that might otherwise take years to complete.
The critical questions are therefore whether borrowed funds were used for their intended purposes, whether the terms were reasonable and whether the resulting projects generated sufficient public value to justify the obligations.
For Anambra, the current administration's claim of an 83 per cent reduction in debt is therefore significant, but it also needs to be considered alongside the actual outstanding balances and the different categories of debt.
Similarly, Obi's claim that he left the state without unpaid obligations is a claim that can ultimately be assessed through financial records from the period of his administration and the state's subsequent debt-service records.
Records Could Settle the Dispute
The renewed disagreement places greater importance on official financial documents.
Documents showing the original loan agreements, dates of disbursement, beneficiaries, repayment schedules and current outstanding balances would help establish which administration contracted each obligation and how much remains to be paid.
Likewise, audited state accounts and FAAC deduction schedules could help clarify how much Anambra has been paying and which specific obligations account for the deductions.
Without such documentation, political statements from either side can provide only part of the picture.
The Anambra government has presented its position through its finance commissioner, while Obi has offered his own account and challenged the government to provide evidence that contradicts it.
For residents of Anambra, the issue is ultimately about more than the political reputations of past and present governors.
It concerns how public borrowing was used, how much the state still owes, how much of its federal allocation is being deducted every month and how effectively the current administration is reducing inherited obligations.
As the 2027 political season approaches, financial records from previous administrations are likely to receive increased scrutiny.
For now, the established facts are that the Soludo administration says Anambra continues to service loans inherited from previous governments, including those of Obi and Obiano; the government says it has not taken commercial bank loans since assuming office and has reduced the state's debt by more than 83 per cent.
Obi, however, disputes the suggestion that he left Anambra with unpaid obligations and says he left substantial funds in government accounts before handing over power.
The competing claims leave the detailed accounting of the state's historical loans and repayments at the centre of the controversy.
