N24.9trn debt: Nigeria may soon become world’s poorest nation, says Obasanjo

…our children, children’s children must be saved from debts

After a spell of reticence, a one-time President, Chief Olusegun Obasanjo, says he is alarmed by Nigeria’s huge debts owing to external borrowings amounting to N24.94 trillion.

Obasanjo, a retired Army General, who held sway as President from 1999 and 2007 after he had served as military Head of State (1976-1979) and handed over to a civilian administration, said:“ Nigeria might become the poorest nation in the world soon’’.

President Muhammadu Buhari is seeking a loan of $29.9 billion which the National Assembly had promised to approve.

Persecondnews recalls that the Obasanjo administration had secured debt pardons for Nigeria from the Paris and London Clubs amounting to some $18 billion and paid another $18 billion to be debt-free.

Under him, the country’s Gross Domestic Product (GDP) growth doubled to 6 per cent while foreign reserves also increased from $2 billion in 1999 from long military interregnum to $43 billion in 2007 at the end of his second term.

Most of the loans were accumulated from short-term trade arrears during the exchange control periods of the military administration.

“As at 2015, total external debt was about $10.32billion.  In four years, our external debt grew to N24.947 trillion or $81.274 billion.

“In 2018, total debt servicing cost took over 60 per cent of government revenue. As if this is not bad enough, we are currently seeking to add another $29.6 billion loan to our already overburdened debt portfolio,” Obasanjo said in Lagos at the first edition of the Nigerian Story organised by the “Why I Am Alive’’ Campaign.

Although the former president said there was nothing wrong in taking loans to finance growth and development, he insisted that it must come “with a high degree of discipline, responsibility and foresight”.

According to him, the Nigerian government is “notoriously deficient in serious and adequate discipline and most often lack competence and consistency.”

Expressing fear that unlike the situation in the past, Obasanjo said the current creditors are less tolerant of Nigeria’s limitations and inadequacies.

On debt servicing, the ex-president noted that at least 50 per cent of country’s foreign earnings is currently committed to servicing debt, warning:“Such a situation tells about an impending bankruptcy because no entity can survive while devoting 50 per cent of its revenue to debt servicing.

“Our current budget, out of which we are spending 25 per cent to service debt is not our total earnings, a lot of it is also borrowing. We are borrowing to service what we have borrowed and yet we are borrowing more.”

Obasanjo said with the decline in global oil price, the situation might get worse and that Nigeria might not be able to secure another debt relief and might become the poorest nation in the world.

While asking Nigerians to speak up against unrestrained borowing , the former president said; “For once, all Nigerians need to rise up and shout in one voice and call on the National Assembly to rise up to its core duty and responsibility and save our children and grandchildren and great grandchildren from being mired in debt.”

He added: “The forecasts now are scary. At the present rate, Nigeria’s population by 2050 will be well over 400 million and Lagos alone will be over 40 million.

“If we continue as we are going now and as we have gone start and stop in the past, we will be one of the most wretched of the world and maybe the most wretched in Africa.”

Human rights lawyers and campaigner, civil society groups and some concerned Nigerians have faulted the decision of President Muhammadu Buhari administration to obtain a whopping $29.9 billion external loan to develop infrastructure.

Instead,they advised the president to restructure the economy and the nation’s bloated and expensive political structure and system of government.


Written by Ajuma Edwina Ameh

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