Abia State Governor Alex Otti has made significant strides in reducing the state's debt burden, cutting it by 75% since taking office in May 2023. The governor inherited a ₦191.2 billion debt profile, but his administration has managed to pay down over 75% of this amount without taking out new loans. This achievement is attributed to a comprehensive audit that exposed previously unreported financial liabilities.
The audit revealed that official records from federal debt management agencies had underreported the state's financial liabilities. Internal reviews uncovered hundreds of billions of naira in off-book liabilities, including pension arrears accumulated over 45 to 56 months, unpaid salaries across state institutions, and contractor liabilities for unfinished capital projects. These hidden liabilities had been recorded as completed.
Governor Otti's administration has been working to settle long-standing pension claims through negotiations with civil service unions and retirees. The administration has disbursed over ₦10 billion in single-tranche payouts to settle these claims. This progress is attributed to plugging revenue leakages, enforcing expenditure discipline, and optimizing internal revenue generation.
Forensic audits commissioned by the administration have exposed past fiscal irregularities, including a ₦10 billion outlay for an unbuilt airport project. The state is actively pursuing recovery of this amount. These audits have helped the administration to identify areas of financial mismanagement and take corrective action.
Governor Otti has assured that his primary focus remains on infrastructure renewal, social services, and structural reforms to sustain the state's fiscal health. Despite the debt clearance, the governor is committed to ensuring that the state's finances are managed in a transparent and accountable manner.
The governor's administration has achieved this progress without taking out new loans. Otti has stated that "the state is running very, very well, and we have not borrowed a single dime." This approach has helped to reduce the state's debt burden and improve its financial sustainability.
The reduction in Abia State's debt profile is a significant achievement for Governor Otti's administration. The governor's commitment to transparency and accountability in financial management has helped to identify and address hidden liabilities, ensuring a more sustainable financial future for the state.
Key points
- Abia State Governor Alex Otti has reduced the state's debt profile by 75% through strategic financial management and audits that uncovered hidden liabilities.
- The audit revealed hundreds of billions of naira in off-book liabilities, including pension arrears and unpaid salaries.
- The administration has disbursed over ₦10 billion in single-tranche payouts to settle long-standing pension claims.
