By Suleiman Anyalewechi
The Abia State Government has expressed deep appreciation to President Bola Tinubu and the Federal Executive Council, FEC, for the approval of a $125 million loan facility for the State from the Islamic Development Bank.
This is as the opposition camp has insisted on the application of the twin principles of transparency and accountability in the administration of the funds.
The Source reports that the loan facility which was approved by the FEC on Wednesday August 13, during its meeting is part of a $263.80 co-financing package for Abia State Integrated Infrastructural Development Project ABSIID.
The funds are to be applied in modernizing the State’s urban road networks, tackling of erosion challenges, as well as rehabilitating infrastructural facilities within the urban areas.
According to the statement, “the financing proposal comprises $125 million from the IDB ,$100 million from the African Development Bank AFDB , 15 million dollars from the Canada-Africa Development Bank and $23.80 million in counterpart funding from the Abia state Government.”
However, while the AFDB and Canada-Africa Development Bank agreements have been concluded, the IDB component is considered vital to the prospect of unlocking the full funding for the projects, going by the integrated structure of the financing package, according to the statement.
“Under the IsDB-sponsored component ,the project is expected to deliver approximately 126 kilometers of roads in Aba ,and 35 .57 kilometers of roads in Umuahia, including a link road between the two major cities of the State alongside critical erosion control works.”
The State Government further emphasized the importance of the projects to the growth and development of the state, noting that when completed they would reduce travel in Abia’s busiest corridors, create over 3000 job opportunities for locals, reduce greenhouse gas emissions, improve access to social services and attract private sector investments.
Governor Otti also lauded the support and understanding of the President, the National Assembly, and other stakeholders that played key roles in securing the loan facility.
“We appreciate the President, for his trust and pragmatic leadership, the National Assembly for approving the borrowing plan, and the Honourable Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edu,for his leadership in concluding the financing process.
“This landmark project will complement my administration’s ongoing infrastructural development initiatives aimed at modernizing Abia’s transportation network, revitalizing urban centres, and positioning the State as a hub for sustainable economic growth”, the Abia state Governor noted.
However, in a statement on Friday August 15,2025 ,a former Commissioner of Finance in the state Chief Obinna Oriaku, warned against any form of misapplication of the funds which negotiations he traced to 2017 .
“The loan purposes are clear — Roads ,Storm water management , erosion control and sanitation.
“It has nothing to do with SMEs etc .That is why we insist that we must demand transparency and accountability on what the Government is doing.
“The loan was initiated in 2017 and approved in Match 2023. What is happening now is mere revalidation of old approvals.
“The State, in 2017, took this route just like other States to revamp their economies by borrowing on long-term basis to enhance infrastructural development which is needed for general economic growth.
“As at 2017 , Abia’s allocation was averagely N2.6b monthly ,a situation which made it impossible to even meet salaries and pensions obligations which were in the region of N2.3billion.
“Therefore, there were cogent reasons to go for the loan then to meet the exigences of the moment since it was a long-term loan facility”, Oriaku said.
Chief Oriaku, an All Progressive Congress Chieftain ,who served as Commissioner for Finance during the first tenure of former Governor Okezie Ikpeazu, (2015-2019), however, noted that going by the improved monthly accruals from Federation Accounts which he conservatively put at about an average of N38 billion in the last few months, called for a judicious and transparent applications of the loan facility.
He advised the Government to ensure that the funds are used in putting in place investments -attracting-projects, so as to mitigate the burden of repayments .
He cautioned against the replication of the debilitating experience of Kaduna State that was seriously reeling from the debt burden left behind by the Malam Nasir El-Rufai’s administration, before reprieve came through subsidy removal induced- windfall.
“However, considering that part of the then Abia’s problems (low Federal Allocations) has been resolved with increased allocations, not minding the high exchange rate, the question now remains: Do we really need this load(loan)?
“If we work on our monthly Internally Generated Revenue, IGR, of about N1.8 billion monthly (outside of school fees) by growing it to about N10 billion , while being prudent and transparent in our expenditures, we can achieve all we want as a state.
” For the records, most of the roads captured in the loan package including the Port Harcourt Road ,Faulks Road , Omuma Road and others have already been fixed ,with others nearing completion.
” If the World Bank decides to revisit these roads or continue from where the present State Government stopped ,what and how will our monthly allocations be used?
“Will the State only pay N4.6 billion out of our about N38 billion monthly allocation, and all, as usual, will start jumping up that Abia is doing well?
“Conversely, this loan has a tenure of 25 years with a moratorium of 5 years. It means the present administration will not be part of the repayment, but will be left to future regimes.
“The loan is dollar denominated- meaning if the exchange rate shoots up to N3000 to the dollar (God forbid), Abians may come back from FAAC meetings with a zero allocation.
” Kaduna State of faced with this grim situation from June 2023 as its monthly.allocation was just N 7 billion, with loaning – serving gulping as much as N4 billion .
The State only became lucky following the windfall from petroleum products subsidy removal, that shot its monthly accruals to about N 42 billion..l
“We, therefore, need to enhance infrastructural development like roads, flood controls and other activities that have the potentials to attract investments which will, in turn, grow the economy as well as mitigate the loan repayment plan”, Oriaku submitted.
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