Former President Olusegun Obasanjo has questioned President Buhari’s plan to borrow more money, declaring that borrowing to accumulate debt for the next generation is criminal.
Obasanjo gave his opinion in an interview with Channels Television on the sidelines of an event in South Africa.
Obasanjo cautioned that if the existing debt is left unserviced or unpaid, it might become a problem for successive administrations.
While noting that borrowing is not a problem, the former Nigerian leader stated that what could be a problem would be what one is borrowing for and the plan or capacity to pay back.
“But if you are borrowing and accumulating debts for the next generation and the next generation after them, it is criminal. What are you borrowing for?” Obasanjo asked.
“If we are borrowing for recurrent expenditure, it is the height of folly. If we are borrowing for development that can pay for itself, that is understandable. Then the payment, how long will it take to pay itself?”
The ex-president recalled that in 1999 when he came to power, 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.”
Nigeria’s debts now stand at N33 Trillion and will rise to N35 trillion as the Federal Government seeks foreign loans to deliver key infrastructural projects.
President Buhari last week wrote to the National Assembly, seeking approval to borrow $4,054,476,863 and €710 million in an addendum to the 2018-2020 borrowing plan.
In the letter, the President explained that owing to “emerging needs”, there is a need to raise more funds for some “critical projects”, while seeking the parliament’s nod to also approve grant components of $125 million.
In July, the National Assembly approved the sums of $8.3 billion and €490 million loans contained in the initial 2018-2020 borrowing plan.
The Presidency on Friday listed the projects that the new loans are meant for.
One of the projects is the rail line from Kano to Maradi in Niger Republic.
