Nigeria’s ex President, Olusegun Obasanjo, has warned the Federal Government of impending bankruptcy while expressing deep concern about Nigeria’s current debt profile.
While speaking at the “Why I am Alive” campaign celebration in Lagos, Obasanjo disclosed in his keynote address that the country’s external debt had grown to 700% from $10.32 billion in 2015 to $81.2.74 billion in 2019.
What it means: Nigeria was committing half of its foreign earnings to servicing its current level of indebtedness.
“Such a situation talks about impending bankruptcy. No entity can survive while devoting 50% of its revenue to debt servicing,” Obasanjo said.
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Obasanjo further explained that the country’s current budget has Nigeria spending 25% on debt servicing, which is not the country’s total earning, as a lot of it is also borrowing. Simply put, we are borrowing to service what we have borrowed and yet we are borrowing more, the Guardian reported.
“I do not need the brain of any genius to conclude that those who use statistics to dig us deeper into debt are our enemies. Statistics can be used to serve any purpose, and that is why Winston Churchill talked of lies, damn lies and statistics, meaning statistics can be made master of lies,” Obasanjo said.
Meanwhile, the former president called for a national debate on Nigeria’s short, medium and long-term plans, adding that his biggest worry was that the country already has fiscal obligations to meet up with.
Pastor Itua Ighodalo, who moderated the session at the event explained that the campaign was designed to empower young Nigerians for the future by tapping into the key lessons from success stories of eminent personalities that have contributed to the social, economic and political growth of Nigeria.
Also, some Nigerians and stakeholders including former vice president Alhaji Atiku Abubakar, the International Monetary Fund (IMF), and the Manufacturers Association of Nigeria (MAN) have continually raised the alarm over the country’s rising debt profile. This follows President Buhari’s request for Senate approval to borrow almost $30 billion for development purposes.
However, the Federal Government has continually maintained that Nigeria is not heading for a debt crisis. Nigerians can only hope the borrowing culminate into visible economic growth and development.