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Anambra State Governor, Professor Charles Soludo, has explained why his administration withdrew the state from a World Bank loan programme, stressing that the prevailing macroeconomic conditions at the time made the facility too costly, despite its low interest rate.
Soludo, who made the disclosure at the Delta State Economic and Investment Summit, yesterday, said the exchange rate distortions at the time meant that even a zero-interest loan could translate into an effective interest rate of more than 100%.
The governor maintained that exchange rate stability remains critical to attracting foreign capital and supporting economic growth at both the national and subnational levels. He said Anambra was the only state that withdrew from the World Bank-backed NG-CARES programme after his administration assessed the implications of the prevailing exchange rate regime. He added that he has not borrowed any money since assuming office as governor.
“When I became governor, I pulled Anambra State out of an ongoing World Bank loan, NG-CARES, and Anambra was the only state that pulled out. Because the macro fundamentals, the foreign exchange, the exchange rate distortions were such that I told the World Bank that even at zero interest, it was still the most expensive fund in the world, given what I knew was going to be inevitable: an exchange rate realignment much later.
“If you are giving me money and I change it at N460 to the dollar, today, when I know that tomorrow it will be over N1,000, even if you lend it to me at zero, the effective interest rate is over 100 percent.”
Soludo added that Nigeria’s macroeconomic environment has since improved, noting that exchange rate stability has enhanced the country’s prospects for attracting foreign investment.
The governor reiterated his administration’s zero-borrowing policy, stating that Anambra has not taken loans from commercial banks, the Federal Government or international financial institutions under his leadership.
Despite the N100 billion borrowing facility approved by the Anambra State House of Assembly in 2022, the Soludo administration did not utilise the facility. In August 2024, the state government denied reports that it was seeking a N245 billion to N247 billion loan to finance budget deficits, describing the claims as false.
Soludo has consistently maintained that his administration has delivered major infrastructure and human capital development projects without borrowing. He also noted that Nigeria’s net foreign exchange reserves had increased from about $3 billion in 2023 to over $40 billion, while gross reserves had risen to about $52 billion, adding that improved macroeconomic stability would support the inflow of foreign capital. Governor Soludo had, in August 2025 expressed strong support for President Bola Tinubu’s reforms, describing them as necessary steps towards stabilising and reviving Nigeria’s economy.
He said his support for the reforms transcended political affiliations because they were aimed at placing Nigeria on a sustainable growth path.
