Peoples Democratic Party (PDP)
Office of the State Chairman
Umuahia, Abia State
Nigeria
August 2, 2025
His Excellency,
Dr. Alex Otti,
Executive Governor,
Abia State Government House,
Umuahia, Abia State.
Your Excellency,
RE: A SHADOW GOVERNMENT REVIEW OF THE ABIA STATE 2025 Q2 FINANCIAL REPORT: NEED FOR GREATER FISCAL PRUDENCE, STRUCTURAL ACCOUNTABILITY & TRANSPARENT GOVERNANCE
On behalf of the Abia State Peoples Democratic Party (PDP), we respectfully write to express grave concerns and offer a constructive critique of the Q2 (April–June 2025) Financial Report recently published by your administration and available on the state’s official website.
As a responsible opposition with a firm commitment to democratic values and development-oriented governance, our role is not to attack but to interrogate, not to diminish but to ensure that the sacred principles of public trust, financial stewardship, and transparent governance are upheld.
While we commend the publication of the financials—an obligation under the SFTAS (States Fiscal Transparency, Accountability and Sustainability) framework sponsored by the World Bank—we are alarmed by certain disturbing fiscal trends and misalignments between financial inflow, expenditure reporting, and the socioeconomic realities confronting Abians.
1. Surging Revenues, Dwindling Outcomes: A Disconnected Fiscal Reality
The Q2 Report shows the following major headline figures:
• Total Revenue (FAAC & IGR): N114 billion
• Average Monthly FAAC Allocation: N38 billion
• Internally Generated Revenue (IGR): N13.2 billion (a decline from Q1’s N14 billion)
• Personnel Costs: N14 billion
• Capital Projects Spending: N75 billion
• Capital Receipts (Loans/Grants/Donations): N287 billion
While the revenue profile suggests strong liquidity, the corresponding social and infrastructural outcomes expected from such an inflow remain untraceable.
This disconnect raises fundamental questions:
What philosophy governs your administration’s budget implementation process? Where is the value return on public funds?
Public Finance, as guided by principles of Financial Economics, is not merely about what is received and spent, but about how equitably and efficiently those resources are applied to optimize public welfare and economic value.
2. Capital Expenditure: Opacity, Not Impact
We note with serious concern the claim that N75 billion was spent on capital projects in Q2 alone.
However, there is a total absence of disaggregated data to show:
• Which specific projects were funded?
• Their respective locations and completion status
• The procurement process and contractor identities
• Citizen impact metrics or value-for-money reviews
The foundational philosophy of Accrual-Based Financial Reporting, as adopted by the International Public Sector Accounting Standards (IPSAS), demands a full disclosure regime, where citizens are empowered to follow the money from budget line to execution output. What we see instead is a presentation heavy on topline figures, but hollow on project-level transparency.
Without clarity, public spending risks degenerating into political patronage or at worst, fiscal obfuscation.
3. Alarming External Debt Accretion
According to your administration’s figures:
• External Debt in 2023: N80.09 billion
• By Dec 2024: N155.79 billion
• New External Debt within One Year: ~N75 billion
Your Excellency, debt—when rightly used—is a development instrument. But when borrowed funds yield no observable return on investment or are applied in a structurally non-transparent manner, they become a burden on future generations.
The Abia PDP insists that:
• A debt sustainability analysis should be immediately published
• Loan terms (tenor, grace periods, interest rates, project tie-ins) should be disclosed
• Repayment capacity must be benchmarked against IGR performance and GDP growth
The World Bank’s public finance management guidelines insist on result-based borrowing, not inflow-based expenditure.
4. Internally Generated Revenue Decline: A Disturbing Sign
Despite increased Federal Allocation, Abia’s IGR declined from N14 billion in Q1 to N13.2 billion in Q2.
This calls into question the state’s economic diversification efforts and the administration’s fiscal capacity-building agenda.
Are we building a sustainable revenue ecosystem or simply riding on oil-price-induced FAAC inflows?
We encourage a shift from revenue extraction from public institutions (like ABSU and state hospitals) to a model that:
• Expands the tax net by formalizing SMEs
• Digitizes land and property records to boost land use charges
• Strengthens business licensing compliance through digital platforms
5. Pension and Salary Arrears: A Breach of Social Contract
The report suggests significant expenditure but contradicts lived realities:
• Many pensioners remain unpaid or underpaid
• Contractors remain unattended to
• Parastatal staff, particularly lecturers at ABSU, report partial disbursement of outstanding wages despite full repayment figures reported to DMO Abuja
This raises not just questions of financial accuracy, but of ethical accountability. Governance is first and foremost a human contract—any budget that fails to honour labour and pension obligations fails the morality test, regardless of how elegant the spreadsheets appear.
6. Recommendation: A Path Forward
In the interest of Abia people, we propose the following immediate steps:
1. Publish a comprehensive capital project audit for Q1 and Q2, with project titles, amounts released, contractors, and physical status
2. Recalibrate the 2025 budget implementation plan to focus on social infrastructure—schools, hospitals, water—and not merely road patching or cosmetic beautification
3. Establish a Debt and Project Transparency Dashboard, accessible by the public, in compliance with Open Government Partnership (OGP) principles
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4. Institute an Independent Fiscal Responsibility Committee composed of professionals from civil society, academia, and the private sector to review quarterly performance
5. Conduct a Value-for-Money audit on all loan-backed expenditures to align with the World Bank’s Disbursement Linked Indicators (DLIs)
Conclusion
Your Excellency, this critique is not an indictment, but a call to higher standards. Leadership must resist the temptation to celebrate liquidity while ignoring productivity. As the governing party, the Labour Party bears full responsibility for every naira collected, borrowed, or spent on behalf of Abians.
A government led by professionals must be held to professional standards. Diplomacy is not silence, and accountability is not antagonism.
We remain committed to our role as a democratic watchdog—scrutinizing in public interest, speaking truth with civility, and standing with Abia people in pursuit of good governance.
Let us remember always: The future will judge not by what we say, but by what we account for.
Yours in service,
Signed,
Elder Abraham Amah
State Chairman, Abia State PDP
