FENRAD Raises Concern Over ₦75bn Rise in Abia’s External Loans.

By Raymond Enoch

The Foundation for Environmental Rights, Advocacy and Development (FENRAD) has raised the alarm over the rising external debt of Abia State, following the release of the 2025 mid-year financial report. The report reveals that the state’s external loan profile surged by ₦75 billion in 2024 alone.

In addition to the increased borrowing, the report also shows that federal allocations to the state now average ₦38 billion monthly—an improvement in revenue flow that, according to FENRAD, comes with both opportunities and risks.

Speaking on the development, the Executive Director of FENRAD, Nelson Nnanna Nwafor, described the dual rise in allocations and borrowing as a “double-edged sword.” He explained that while it provides resources for development, it also raises serious questions about debt sustainability and financial accountability.

“We view the rising allocation and borrowing as a double-edged sword,” Nwafor said. “On one hand, it presents an opportunity to invest in public infrastructure and services. On the other, it raises critical concerns about debt sustainability, transparency, and accountability.”

According to the financial audit report published by the state’s Accountant General and available on the official government website, Abia’s cumulative external debt rose significantly in the first half of 2025. FENRAD emphasized that such borrowing must be backed by clear information on the purpose, terms, and intended impact of the loans.

The organization has issued a set of recommendations to guide the state government in navigating the fiscal challenges ahead. Chief among them is the need for greater transparency in the management of public debt.

FENRAD urged the state to disclose full details about the loan agreements, including the source of funds, interest rates, repayment timelines, and expected benefits to the public. The group also called for the strategic deployment of the ₦38 billion monthly allocation to priority sectors such as infrastructure, education, healthcare, and youth employment.

In addition, FENRAD stressed the importance of involving citizens, civil society organizations, and the media in budget monitoring and project tracking. The organization proposed the use of public forums and digital tools to enhance transparency and public oversight.

Another key recommendation was directed at the Abia State House of Assembly, which FENRAD urged to step up its legislative oversight to prevent fiscal abuse and ensure that loan-financed projects deliver measurable value for taxpayers.

To avoid a debt crisis, the group also advised the state government to adopt a sustainable, long-term debt management strategy that aligns with Abia’s capacity to repay loans without compromising essential social services.

FENRAD warned that the current financial windfall must be handled with care and responsibility. Mismanagement, the group noted, could deepen public distrust and trigger economic instability.

“The future of our state depends on what we do with the resources we have today. Abia must not squander this opportunity,” the group said in its statement.

While reiterating its commitment to promoting good governance and fiscal accountability, FENRAD called on all stakeholders—government agencies, the legislature, media, and citizens—to play an active role in ensuring that public funds are used effectively and equitably.