I’m Really Concerned About Nigeria’s Borrowings – Peter Obi

The 2023 presidential candidate of the Labour Party (LP), Peter Obi, has said he is really worried about the country’s persistent borrowings with its galloping rate over the years.

In a series of posts via his official X handle on Tuesday, Obi said he is more concerned that loans have not been used judiciously or on investments as required by the law.

He said it was disturbing that at the end of the Second Quarter (Q2) of 2023, the nation’s debt stood at ₦87.9 trillion because the country is at a loss as to what was done with the huge debt.

Obi stated that over ₦23 trillion Ways and Means borrowed by the last administration would have been the end of borrowing without any visible and corresponding investment and benefit to the nation.

He wrote: “I remain concerned about our borrowings, considering their galloping rate over the years, and its concomitant effects on the economy. More worrisome is the fact that there has been no corresponding visible usage or investments, as required by the law, to show their impact on the nation’s development.

“At the end of the second quarter, Q2, of 2023, our debt stood at ₦87.9 trillion, which was very disturbing to us, because we were at a loss as to what we did with the huge debt, especially the over ₦23 trillion ways and means borrowed by the last administration, which for me, would have been the end of borrowing without any visible and corresponding investment and benefit to the nation.

“But sadly and more worrisome is the fact that between the end of the third quarter, Q3, and the end of the fourth quarter, Q4, of 2023, about ₦10 trillion was added to our debt portfolio, which has now taken our debts to ₦97.3 trillion, again, without any corresponding visible and verifiable utilization. This is the highest ever borrowed in one quarter.

“Last year, 2023, our total debt servicing for domestic debts stood at ₦4.4 trillion and that of external debt servicing was $3.5 billion, which is about ₦4.9 trillion. In effect, approximately ₦10 trillion is now spent on servicing unproductive debts. The implication is that what we borrow in a quarter is about ₦10 trillion, and what we spend on debt service is also about ₦10 trillion.

“Each of these is more than the combined budgetary allocation for the four highest priority areas: defence (N3.25trn), Education (N2.18trn), Health (1.33trn), and Infrastructure (N1.32trn). My appeal to the government of the day is to de-accelerate the borrowing and let us first re-evaluate what has been achieved with previous borrowings and make better decisions for the good of the nation.

“In the New Nigeria of our dream, our scarce resources will not only be duly accounted for but will be productively and prudently managed in moving our nation from consumption to production.”