Soludo and Anambra heavy debt burden

Soludo and Anambra heavy debt burden

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The challenge of overcoming the huge debt profile inherited by the Anambra State Governor, Prof Chukwuma Soludo, remains a point of discourse among stakeholders in the state and beyond, writes OLUWAFEMI MORGAN

ONE of the unique selling points that Prof Chukwuma Soludo’s campaign team highlighted during the electioneering for the governorship poll in Anambra State was the international pedigree of the former governor of Central Bank of Nigeria, as well as the financial intelligence that he would bring to the fore after assuming office as the Governor of Anambra State.

This hope was largely hinged on the fact that Soludo would consolidate the strides of his predecessor, Willie Obiano. Many people expected that Obiano would follow in the footsteps of his predecessor, Mr Peter Obi, formerly of the All Progressives Grand Alliance, the same political party as Obiano and Soludo.

Peter Obi, who is currently a presidential aspirant on the platform of the Peoples Democratic Party, has been widely applauded by political pundits as the governor who prudently managed the state’s funds.

Recently his media aide, Valentine Obienyem, stressed that Obi left N2,139,951,400  in First Bank (Account No. 2018779464) for Oko erosion; N4,909,576,925.98 in Sure-P Diamond Bank account (0026290200); N1,782,568,032 in UBEC 1 Diamond Bank account, (0023484282); N2,101,864,766, UBEC 2 Diamond Bank Account (0031151473); over N4bn in many Millennium Development Goals accounts, one of which was the N3,048,355,196 in Fidelity Bank (5030047097); over N35bn cash (set aside funds added) in all the banks.”

However, his successor, Willie Obiano had debunked the notion that Obi left behind a ‘fortune’. He made this known in a widely circulated article by his media aide, James Eze, in October 2021, when Obiano marked 100 days in office.

Eze alleged that Obi left Obiano with N127bn liabilities as he did not complete 101 roads, hotels, shopping malls and power projects. The media aide claimed that Obi was deceitful about most of the funds he claimed to have left in the state coffers.

He said many of them were dormant investments made for the state by Obi and previous leaders. Eze lamented that Obiano struggled to convert those assets into “cash” for the running of the state.

According to the National Bureau of Statistics, Anambra State’s Internally Generated Revenue ranged from N7,396,560,094.34 in the half year of 2016 to N9,017.138.347 in the half year of 2017. As of October 2019, the state was reported to be grappling with N33.49bn. However, the Director of the Anambra State Internal Revenue Service, David Nzekwe, in January 2022 disclosed that the state’s revenue slid from N9bn to N8.7bn yearly, although he boasted that the state could earn N120bn yearly.

BudgIT, a Nigerian civic organisation, earlier noted in its 2021 report that only Lagos, Rivers and Anambra states could take care of their affairs and fund their 2022 budgets without a bailout from the Federal Government. It explained, “They meet their operating expenses obligations with a combination of their internally generated revenue and Value Added Tax.”

Perhaps Nzekwe’s revelation did not take into cognisance the frequent curfews in the state and the South-East that had led to the loss of income, neither did the Anambra State IRS boss consider the economic shocks that rippled through all the states of the federation during the COVID-19 pandemic.

Anambra State was also the only state that did not receive the N614bn bailout funds granted by the Federal Government to pay salaries in 2017, due to dwindling federal allocations to states. However, it received N6,121,656,702.34 out of the N243.8bn Paris Club loan refund to the states.

The PUNCH reported that Obiano was later arrested by the Economic and Financial Crimes Commission over an alleged mismanagement of the Paris Club refund, amongst others. He was later released on bail from the custody of the EFCC, while his passport was seized by the agency.

It was therefore a surprise to many when Soludo lamented in an Arise Television interview that the state of finances he inherited was not robust and that only N300m or N400m cash was left for him in addition to statutory debts of over N100bn and undisclosed contingent liabilities, including contractors’ debts running into billions of naira.

Unfortunately, many felt Anambra State was in relative competitive standing compared to other states as they hoped the governor would hit the ground running. Soludo, who assumed office by embarking on a low-budget inauguration, hinted that the state was also bogged down with huge debts that might frustrate his lofty plans.

During his campaign, Soludo had promised to create the Anambra State Development Fund, a proposed $200m fund which he hoped to scale to $1billion in order to embark on infrastructure projects in the state. He also planned to create thousands of millionaire entrepreneurs through a 5bn venture capital fund for startups and businessmen. Soludo also proposed a public-private partnership that would help channel natural gas to the state in order to improve the efficiency of manufacturing industries.

In defence of Obiano, the former Commissioner for Information, Don Adinuba, argued that the former governor used state funds to embark on critical projects for the state. Adinuba said the Anambra International Cargo Airport, the Awka Township Stadium and the International Convention Centre were key capital projects embarked upon by Obiano.

He debunked claims that Obiano mismanaged state funds reportedly entrusted to him by his predecessor (Obi), while asserting that Obi handed over a lot of uncompleted projects to his successor.

“The administration of Peter Obi claimed it kept N75bn. Of what benefit is keeping N75bn in the coffers when the state lacked critical infrastructure like roads? Of what use is keeping N75bn in the coffers when there are many things to do with the money that could impact the standards of living of the people?

“What is the point leaving N75bn when the entire Anambra West did not have one tarred road and any infrastructure whatsoever, Anambra needed infrastructure. So, what is the purpose of leaving N75bn if actually the money was left?

“You know the administration I served carried out critical projects and I was not the commissioner in the first term, and from all indications, Obiano contested that N75bn was kept, and even if at all they left N75bn, how come there was no one single road in the whole of Anambra West Local Government Area? Do you keep the money for the records or you are supposed to solve problems with the money,” he queried.

However, a Peoples Democratic Party chieftain in the state, Chibunna John Okoli, said state’s financial status did not come to him as a surprise because Obiano embarked on white elephants. Okoli told Saturday PUNCH while Obi went about governance with transparency and accountability, Obiano believed in political grandstanding.

He advised Soludo, saying, “The main essence of getting power is to better the lot of the people. If Soludo says Anambra treasury is empty, what he should do is to find out what led to the empty treasury. It is a challenge to cut down the cost of governance; that was what led to the huge debt the immediate past regime incurred. If he cuts down the cost of governance, then he will prioritise his programmes, activities and projects.

“He should not engage in white elephants like the nearly useless architectural disturbances that we call flyovers in Anambra State now. They are of no immediate need to the people of Anambra State, apart from his political grandstanding. The amount of money wasted on flyovers was also wasted on the International Conference Centre (by Obiano), which could have been channelled to more productive projects.”

The PDP chieftain claimed that Obiano did not consolidate the good developmental works, management of funds, timely payment of salaries, gratuities and pensions, good network of roads and accountability and transparency put in place by the Obi administration.

 He advised Soludo to publish his handover note on one hand and publish the realities on the ground on the other hand so that Anambra people would be able to measure his performance based on the facts available to them.

 “The main thing is that people do not appreciate the main essence of governance and when you do certain things, he (Obi) felt that there was no need to boast about them. He was paying pensions, gratuities and salaries as and when due.”

He said it was on record that apart from building infrastructure, he left funds in the treasury while leaving office. “Peter Obi’s governance was essentially the salt of governance, he maintained state affairs,” he argued.

“We talk about transparency and accountability, when Peter Obi was there he kept Anambra’s books in a very proper manner. That was why donor agencies came to partner with him. Obiano came and felt that the best way to go about governance was by sheer grandstanding.

“What Soludo should do, having summoned the courage to tell Anambra people that the treasury is not just empty but has accumulated debt, is to publish the handover note he received. He should also publish the reality on the ground because the handover note may not reflect the realities on the ground as of March 16, 2022.

“Anambra people will now judge him from where he is starting to where he will end. I would say that Soludo owes a historic duty to the Anambra people not to fail. He was elected to correct the anomalies of his predecessor.”

On his part, the former Publicity Secretary of the All Progressive Congress in the state, Okelo Madukaife, said the debt profile of the state was not a new thing. He accused the former governor and the APGA-dominated state House of Assembly of working closely with the governor to bring the state to misfortune.

Madukaife, who was reportedly removed by the APC for alleged anti-party activities, especially for congratulating Soludo on his victory, said, “Some issues are therefore not as new as they are being made to sound because they did not happen in one day. Anambra State is in a mourning mood, having been raped financially, and the good people of Anambra State deserves better than what they are currently getting from APGA.”

 Meanwhile, the board chair of the International Society for Civil Liberties and Rule of Law, Emeka Umeagbalasi, said it was shocking and disheartening that Obiano and members of his cabinet almost “grounded” the state’s treasury, and left Anambra with huge statutory and non-statutory debts and liabilities.

Umeagbalasi pointed out that it was beyond belief that a state with monthly wage bill running into billions of naira could have such paltry cash deposit that was less than 10 per cent of its March 2022 wage bill. While commending Soludo for stating the finances inherited from the immediate past administration, he urged the governor to lay bare the facts and think outside the box in meeting the state’s statutory obligations.

He said, “The starting point is to state with utmost clarity the exact funds, assets, liabilities and prospects handed over to him without equivocation because the issues that have been thrown up are now beyond the level that can be resolved by approximation.

“We, like all Ndi’Anambra, are so frightened by the sad reality and are convinced that nothing short of total recovery efforts would yield any hope or add meaning to any political development. As it stands, with the update, we are sorry to admit that there is no honeymoon at all. So, we encourage the governor and his team to build on the problematic records he met to a point where no crack would be noticed.”

In a similar vein, the immediate past President, Onitsha Chamber of Commerce, Chris Ukachukwu, said the current governor should not dwell excessively on the lean resources he met in the coffers of the state. He advised him that he should be focused, courageous and determined to deliver good governance irrespective of the realities on the ground.

He advised the governor to deploy more technology in solving revenue generation and block leakages in the system.

He said, “The governor should make use of technology in solving revenue generation in the state and prevent it from getting into individuals’ pockets. The issue of using contractors for revenue collection has been proven to be ineffective. The obvious challenge that is facing the new government is the ease of doing business. Anambra is a state full of commercial activities, but you find a lot of impediments to the free flow of economic activities.

“There is also the problem of illegal revenue collectors and these are daunting challenges because the state is big and there is inadequate machinery to ensure that the people are allowed to carry on their business effectively.”

Also speaking, a former chairman of the Anambra State Internal Revenue Service, Dr David Nzekwu, said the governor should leverage the 2.1 million potential taxpayers in the state and the available digitalisation expertise to improve  state’s financial resources and income generation.

“With technology, the state can bring the 2.1 million taxpayers into the payment system; this means if they can be distributed into the database, they will begin to make payment and the government will have a lot of money to execute its needs,” he said.

Adding his voice to the issue, a Professor of Political Economy and management expert, Pat Utomi, said Soludo would find “creative options and would use his robust network to create solutions that would improve the fiscal fortunes of the state”.

Utomi advised Soludo, “He should be more private sector-inclined and he should create a stable environment that would guarantee the safety of private sector investment. Clearly, I know he has the network. If he can get the appropriate collaboration, he would be able to generate growth very quickly.”

While speaking on the low tax collection in the state, he said, “Anambra can probably collect 10 times as much tax than it is collecting presently. But more important is the need to create an environment conducive for investment. Once they do that, the investments will come in, which would create jobs and he will get the dynamic growth right.”

However, the Chief Executive Officer, Cowry Asset Management, Johnson Chukwu, commended the governor for cutting down the cost of his inauguration expenses.

Chukwu advised, “One of the ways to save money is to cut down on your cost. He is also talking about generating revenue. Anambra is one of the most economically viable states in terms of per-capital income.

“So, if he gets a lot of people to pay taxes, it will boost the state’s internally generated revenue. Onitsha, Nnewi, Awka are commercially viable towns where he can generate some IGR. He also should work with some international development partners to fund infrastructural development in the state.”

Although Soludo may have found himself between the devil and the deep blue sea, many pundits believe he has the intelligence, capability and the magic wand to find systemic solutions and create a buoyant culture of accountability for the state.

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