Former President Olusegun Obasanjo, has criticised the Federal Government’s recent plan to source fresh loans.
According to him, borrowing to accumulate debt for the next generation is criminal.
Recall that last week, President Buhari requested the approval of the National Assembly to borrow $4,054,476,863 and €710 million.
In a letter Senate President Ahmad Lawan read at the senate, Buhari explained that there is a need to raise more funds for some “critical projects”.
Obasanjo, while speaking to Channels Television on Sunday criticised the move and said if the existing debt remains unserviced or unpaid by the current administration, it might become a huge problem for successive governments.
Obasanjo added that borrowing is not a problem, however, he said it would be better if the borrowed funds were used for development and there is a plan or capacity to pay back.
He said: “If you want to build a commercial house and you go and borrow money, and you have 50 percent of your own money and you borrow 50 per cent and in five years, you pay the 50 per cent that you borrowed. That is a wise thing to do. But if you have to go and borrow money for you to be able to feed yourself and your family, that is a stupid thing to do.
“So, if we are borrowing for recurrent expenditure, it is the height of foolery. If we are borrowing for development that can pay itself, that is understandable; then how long will it pay itself? But we are borrowing and accumulating debt for the next generation and the next generation after them, it is criminal, to put it mildly. What are we borrowing for?
The ex-president recalled that during his tenure in 1999, the country was spending $3.5 billion to service debts that kept on increasing.
“When I came into government as elected President, we were spending $3.5 billion to service debts. Even with that, our quantum of debts was not going down.”
The Debt Management Office (DMO) said Nigeria’s total public debt climbed to N35.46 trillion at the end of the second quarter (Q2) of 2021.
