A dispute over Peter Obi’s claim that he left Anambra State without debt has raised questions about how government loans are classified and whether concessionary loans obtained through the Federal Government count as state debt.
Obi, who governed Anambra from 2006 to 2014, has maintained that he left the state financially sound. His handover report showed more than N86 billion in net balance.
However, the Anambra State Government says Obi’s administration left external loans that are still being repaid.
What does the DMO say?
The Debt Management Office (DMO) says a loan obtained through the Federal Government for a state remains part of that state’s debt stock.
DMO Director-General Patience Oniha told The Nation:
“I am not validating your data. If an external loan is facilitated by the FGN for a state, the debt will be included in the debt stock of the state.”
This means the fact that a loan is obtained through the Federal Government or offered on concessionary terms does not, by itself, remove it from the borrowing state’s debt obligations. The DMO maintains records of sub-national debt, including states’ external obligations.
How much does Anambra say is owed?
Anambra Commissioner for Information, Law Mefor, said eight external loan programmes linked to Obi’s administration had a combined outstanding balance of $92.35 million, equivalent to about N127.4 billion, as of June 30, 2026.
The loans were for projects including malaria control, healthcare, education, erosion management and community development. The state said the original external borrowing linked to the programmes was about $123.77 million.
Mefor said:
“Let’s be clear: hardly any government in the world has zero debt stock. The issue is not whether or not borrowing is good: no business or government can scale significantly without some debt.”
The state government also alleged that Obi left other unpaid obligations, including some salaries, pensions and gratuities.
What is Obi’s defence?
Obi’s media aide, Valentine Obienyem, disputes the way the loans are being described.
He argues that the loans were mainly multilateral, highly concessional development credits from institutions such as the World Bank’s International Development Association and IFAD, obtained through the Federal Government.
He said:
“Lumping multilateral development grants and concessionary credits together with commercial bonds or high-interest short-term loans is a fundamental category mistake.”
Obienyem also argued that some of the programmes were signed during Obi’s tenure but were not fully drawn down until after he left office.
So, is ‘zero debt’ possible?
The disagreement partly comes down to what is meant by “zero debt.”
A government can leave office without unpaid salaries, pensions, contractor bills or overdue debt payments while the state still has long-term loans that are being serviced according to agreed repayment schedules.
Former CIBN Registrar Uju Ogubunka explained:
“If one borrows money with 20 years tenure, and was in office for five years, and paid mandatory N100 million required per annum, until the end of his tenure, if he kept to the repayment terms, you can also say that you left no debts, but that does not mean that the state had no debts.”
In other words, “no overdue payments” and “no outstanding debt” are not necessarily the same thing.
The central issue in the Anambra dispute is therefore whether Obi’s statement referred to unpaid or overdue obligations at the point of handover, while the state government is referring to outstanding long-term loan balances that remained on Anambra’s books.
The DMO’s position supports the latter classification: where an external loan is facilitated by the Federal Government for a state, it is included in that state’s debt stock.
