Abia State Governor Alex Otti has said that his administration has reduced the state’s debt from N191.2 billion inherited on assumption of office to N48.4 billion.
Speaking during an Exclusive interview with ARISE NEWS on Friday, Otti disclosed this while speaking on the state’s finances and his administration’s approach to debt management and public spending explaining that the inherited liabilities included contractor debts, pension arrears and obligations to multilateral organisations, with the latter accounting for about N148 billion based on figures from the Debt Management Office.
Otti said his administration had paid down almost 75 per cent of the inherited loan obligations.
“We have taken almost 75% of that loan out we’ve paid.”
The governor said the debt reduction was achieved alongside increased spending on infrastructure and other capital project asserting that his administration had maintained capital expenditure at between 80 and 82 per cent of the state budget over the last three years, leaving about 18 to 20 per cent for recurrent expenditure. “So that helps discipline us. So what does that do? That leaves us with a lot of the money to build roads, clean the environment, build hospitals, rebuild schools, and all the things you see.”
Otti said controlling the cost of governance was also central to managing the state’s finances.
“It is a major problem in the country. If you don’t manage your costs very well, you will find that year in, year out, you are struggling. You are working hard. You are sweating, but it’s not showing.”
He said his administration had brought the cost of governance down and kept it within 20 per cent of expenditure. “Brought it down, caged it within that 20%.”
The governor said salaries accounted for about 11.9 per cent of the state’s expenditure, adding that the government had maintained the ratio despite implementing the new minimum wage.
“Both salaries and, for instance, about 11.9% of our cost goes into salaries and all that. And we keep it there. Even though minimum wage increased, and we are one of the first states to implement, we make sure that every other thing gets cut down.”
Otti said Abia’s N1.16 trillion 2026 budget was built around high capital spending, with about 80 per cent allocated to capital expenditure saying that the state’s internally generated revenue was projected at about N223 billion and argued that the spending structure was sustainable. “Yes, because you will be right to say that is unusual. But that is the ideal situation. That is what it should be.”
“So it is not an operation. It is sustainable. If we can do it now, then we can continue doing it.”
The governor said the administration was focused on building the state’s productive capacity rather than increasing spending on consumption. “We are not spending on consumption. We are spending to build a resilient economy.”
Otti also linked the state’s infrastructure spending to its wider economic strategy, saying roads, power and other infrastructure were necessary to support businesses and manufacturing, exolaning Abia had already built about 450 roads and prioritised electricity supply to support manufacturers in Aba.
“When we came, we started with power. And we have done studies, not just in ABBA, but elsewhere in the country. And you find that for manufacturers, close to 60% of their costs is in energy.”
Otti said the state’s intervention in the power sector included support for Geometric Power, which he said became operational about a year after his administration began. “And one year after, Geometric was up and running. And that solved a lot of problems.”
He said the state was also working with TotalEnergies on an alternative gas supply arrangement to strengthen electricity generation. “And we are successful in that, because Total Energies will be able to supply gas as an alternative.”
Otti said the administration’s approach was based on using public funds to build infrastructure and strengthen the productive economy. “That’s what China did. … It does appear like a model from China. It’s a model that works.”
He also pointed to the United States’ continued investment in infrastructure as another example of how sustained spending could support economic development. “So it’s not a fluke. It is a system that is built on the basis of data.”
On the sustainability of the state’s spending model, he said: “So the direct answer, it is affordable. It is sustainable. It is the only way to go. Anytime you reverse it, of course, you pay the price.”
Erizia Rubyjeana
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