Anambra under Obiano recorded lowest domestic debt among states, says BudgiT

Anambra State under the governorship of Willie Obiano achieved remarkable fiscal discipline that kept the financial position of the state in good standing.

Obiano, who governed Anambra from 2014 to 2022, achieved one of the lowest debt positions among states of the federation. Large parts of the funds borrowed from development partners were channelled to physical infrastructure. In its State of The States report 2021, BudgiT disclosed that, while in office, Obiano prioritised investment in capital projects and recorded smallest operating expenses.

The BudgiT report showed that as a low-debt state, Anambra’s total debt stood at N100.05 billion (inclusive of $108.09 million external debt). The state’s total debt per capita stood at N16,343, significantly lower than the country’s average of N27,316.

It explained that Anambra under Obiano had one of the smallest domestic debts in the country ranking 24th by size.

BudgiT said despite fiscal shocks induced by the Coronavirus Disease (COVID-19), the state’s year-on-year Internally Generated Revenue (IGR) increased by 6.22 per cent from N26.37 billion in 2019 to N28.01 billion in 2020, compared to a 36.59 per cent growth witnessed between 2018 and 2019 when the state pulled in N19.31 billion and N26.37 billion, respectively.

It said Anambra under Obiano was among five states within the federation that prioritised investment in capital infrastructure over operating expenses in 2020. Other states to achieve this feat in 2020 are Ebonyi, Rivers, Cross River and Kaduna.

Out of Anambra’s N110.33 billion 2020 spending, N63.23 billion (57 per cent) went for capital expenditure, while operating expenses gulped N43.77 billion and N3.32 billion on loan repayments.

The state’s 2020 capital expenditure of N63.23 billion represents 27.71 per cent increase from the N49.51 billion capital spending in 2020, making it one of the 19 states in the country to increase capital expenditure, even as COVID-19 dealt blows of varying degrees, to all states.

At N43.77 billion, Anambra had one of the smallest budgets for running the state government among the 36 states. It cut its overhead component of its operating expense by 22.11 per cent from N23.55 billion in 2019 to N18.34 billion in 2020.

The report showed that with a total debt burden of N1.04 trillion, up by 19.73 per cent from N871.33bn in 2019, Lagos State was the most indebted state in the federation. Lagos also had the highest external debt of $1.41 billion, giving it the highest exposure to risks of exchange rate volatility.

Despite overall decent fiscal performance in 2020, Anambra still needs to take critical measures to improve its resilience by boosting foreign trade in the state, to increase economic prosperity.

BudgiT said with a current total volume of 203 trillion cubic feet (worth N192.85 trillion) of natural gas in the country (and the largest reserves on the continent), Anambra can facilitate the extraction of its own local potential by engaging the Federal Government on extraction.

It added that Anambra also has potential to produce rice, as the latter’s global export market was worth $24.5 billion (or N13.4 trillion) in 2020.

According to BudgiT, Anambra can collaborate with Ebonyi, Kebbi and Benue states to form a rice farming and processing economic belt.

This, it said, can aim to meet local demand and claim up to 10 per cent of the global export market per year, leading to the creation of a significant number of jobs.