Fiscal responsibility without borrowing by Anambra State government 

The government of Professor Charles Chukwuma Soludo’s  regime of fiscal responsibility and sustainability is not only the answer to the global and macro- economic  turn but also an eloquent social engineering for poverty alleviation and taming of inflationary spiral in consume prices of food stuffs and household commodities.

Social engineering, in the context of poverty alleviation and controlling inflationary pressures on food and household commodity prices, refers to a range of policy interventions and societal efforts of the government of Anambra state designed to reshape economic behaviors, redistribute resources, and create environments where social and economic well-being can be improved.

Soludo’s fiscal responsibility without borrowing is a governance principles in the execution of projects without reckless spending or budget deficits that warrant borrowing from the money market or international finance organisations. What are the approaches to this economic tool on governance?

Fiscal responsibility without borrowing emphasises the principle of maintaining a ‘balanced budget’ or ‘living within one’s means’. This approach focuses on ensuring that government spending does not exceed its revenue, avoiding the need to incur debt for financing expenditures. It requires prioritising essential spending, reducing unnecessary costs, and potentially increasing revenues to align with expenses, all while ensuring long-term financial sustainability.

In the face of resource constraints the government of Anambra state  appropriated and domesticated the Federal government of Nigeria’s minimum and living wage despite its non concurrent  focal status. It’s not only passed as a law in the state, it’s also a reality. The formal sector was a beehive of celebration of the constellating higher notch and raised bar in economic empowerment and poverty alleviation in the political economy of the sub-national, the light of the nation in the geographical landscape of Nigerian nation state.

The regime of public finance in Nigeria had left every state in very turbulent times in terms of rising prices of energy consumption, premium motor spirit, social services and food items. To Cushion the harsh consequences of these the government relieved the social burden of Pensioners in local government and primary schools with the payment of pensioners for those who retired from 2018 to 2022. That amounted to about 14.6 billion naira. Those who retired in the state civil service and in secondary schools have had their gratuity arrears amounting to 7.6 billion simultaneously paid and cleared. The backlog of arrears of those who retired from the state, secondary schools, and so on were also cleared.

The commitments to ensure a prosperous homeland, in-spite of scarcity of resources,  is the driving force and ideology that is propelling the fiscal justice and equity across sectoral divides in Anambra state. This is, to a great extent, achieved without reckless borrowing  from domestic and foreign sources. Borrowing is not a bad thing in itself, provided you put it in something that will enable you to pay back.

“We don’t want to encumber the future. I’m not going to take money for consumption. I’ll borrow to build capacity for the future. We’ll have a loan to build enablers to give our people the capacity that will take them to the future. We are propelling projects and programmes that will qualify for that”, says Profess Charles Chukwuna Soludo.

The minimum wage law passed with the adroit and expeditious executive arms of the government followed simultaneously with the payment of the minimum wage in Anambra state. The idea is to cushion the effects of inflation as well an investment for children and those yet unborn. “If God in his infinite wisdom decided that we will be ndị Anambra, we have a duty to make it prosperous and leave no one behind. It is tough”, says the Governor.

For the local governments, the government ensured that whoever retires, once their documentation is done, their gratuity is paid, and then pensions. There is an inbuilt  process for managing retirement benefits for employees in local governments.

The procedure ensures that the retirement process is smooth by focusing on two key aspects: gratuity payment upon completion of retirement documentation. It is to ensure a smooth retirement process which focus on several key steps, including documentation and final payments.

To be ranked among the top states in terms of fiscal sustainability and viability is not a small achievement for Anambra state. Hence, the state focuses on sound financial management, such as balancing budgets, controlling debt, and maintaining strong reserves. Key steps include improving revenue diversification, investing in economic growth sectors, controlling public spending, and enhancing transparency.

The state government would be emphasising a strong commitment to fiscal responsibility and sustainability. Ensuring commitment to fiscal responsibility requires a combination of sound policy, accountability mechanisms, and long-term planning, establishing clear fiscal rules and targets, e.g., debt limits, balanced budget requirements or targets that guide public spending and revenue generation. These would provide long-term stability and prevent excessive borrowing.

Professor Dukor is the President/Editor-in-Chief, Essence Library (Cultural and Scientific Development Center), Department of Philosophy, UNIZIK.