N458b projected debt profile: Is Soludo planning to borrow away Anambra’s future? ~ by Chima Christian
No truthful person who has had the time to study Soludo’s audacious plans for Anambra will fault more than a tiny part of the plan. The admiration begins to wane when you look at the implementation strategy. The feeling gets worse if you zoom in on the plan’s resource mobilisation model.
The “Soludo Solution” will require, at the very least, N250 billion per annum to implement. So where does the government intend to get the money from? Anambra’s 2023 draft “Budget of Acceleration” has some answers. (See attached picture or page xv and page 5 of the draft budget).
When Soludo applied for, and obtained the approval to borrow N100 billion weeks after assuming office, the excuse was that he met an empty treasury. Today that excuse has been taken care of by nature.
Yet the government is continuing to pursue what it calls a “realistic budget execution in such a way that budgeted amounts and actual spending are not significantly different.”
Ignore the fine grammar, the government simply plans to keep borrowing. And the amount is staggering.
In addition to the N100 billion the government of Anambra State is expected to have borrowed by the end of 2022, Soludo plans to borrow additional N18 billion in 2023, N86 billion in 2024 and N92 billion in 2025.
Of all these loans, only N18.1 billion representing a mere 6% of the total expected loans are tied to specific projects. The rest are to be spent as it pleases the governor and his team. This becomes problematic seeing how weak the state house of assembly, civil society, media and opposition parties in the state who are supposed to offer checks and balances are.
If Soludo follows through on his plan, he will leave Anambra with a projected debt profile of N458 billion by the time his first tenure ends in March 2026. That’s almost half a trillion Naira.
This would be the highest jump in Anambra’s debt profile at any given time. It will also be the highest marginal percentage increase over any four-year period of time for any state government in Nigeria.
Ndi Anambra should invite the government of the day to radically review their plans and pump the brakes on loans. While the idea of turning Anambra into a “liveable and prosperous homeland” is admired, the government should be encouraged to find creative ways to fund their otherwise beautiful ideas.
To be sure, borrowing in itself is not bad. It gets tricky when a government plans to borrow more than half of its annual earnings. If the loan is a one-off thing, it won’t present a problem, but planning to borrow for four, and possibly eight, consecutive years is something that has to be subjected to a rigorous debate.
Anybody looking at the federal government’s revenue to debt servicing obligations ratio will not have difficulties imagining a post-Soludo Anambra state.
If these high-octane plans are not reviewed, Soludo will, through crippling debt servicing obligations, tie the hands of at least two governors that will come after him.
For me, it does not matter that current occupants of Anambra’s seat of power see themselves as belonging to a higher class of animals whose words like “cut your coat according to your cloth” seem like a mere suggestion.
I believe that I have done my part as a member of the attentive public. In hopes that Ndi Anambra who these loans are being taken on the backs of their unborn children will lend their voice to the debate.
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