Former Nigerian president, Olusegun Obasanjo, says the country’s current debt situation is closer to the prevalent situation in the 1970’s and 1980’s that led Nigeria and the African continent as a whole into un-serviceable debts.
He said Nigeria risks bankruptcy with its penchant for loans under the current administration and the amount used in servicing the loans.
He added that he feels it is his “duty and responsibility” as a citizen to enrich public discourse with insights and perspectives on topical national issues.
According to the retired president, unlike the situation in the past, however, the current “creditors are less tolerant of our limitations and inadequacies.”
Obasanjo said although it might not be totally wrong to take loans to finance growth and development, such decisions ought to come “with a high degree of discipline, responsibility and foresight”, stating that the Nigerian government is “notoriously deficient in serious and adequate discipline and most often lack competence and consistency.”
As an example, he sighted the Lagos light rail project and other projects that seem to have been abandoned by government despite securing loans to execute them.
Speaking further on the burgeoning debt portfolio, Mr Obasanjo said Nigeria is already borrowing to service existing loans.
“As at 2015, total external debt was about $10.32 billion. In four years, our external debt grew to $81.274 billion. To service this current level of indebtedness, we must commit at least 50 per cent of our foreign earnings, such a situation tells about an impending bankruptcy because no entity can survive while devoting 50 per cent of its revenue to debt servicing.”
He was speaking in Lagos at the first edition of the Nigerian Story organised by the ‘Why I Am Alive’ campaign.
