In a recent statement posted on his X handle, Peter Obi, the Labour Party’s presidential contender in the 2023 elections, expressed deep concern over the escalating debt burden imposed on Nigerians by the APC-led administration. Emphasizing his vision for a “New Nigeria” focused on production rather than consumption, Obi called on the government to reassess the outcomes of past borrowing endeavors and prioritize decisions that benefit 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 N87.9 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 N23 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 N10 trillion was added to our debt portfolio, which has now taken our debts to N97.3 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 N4.4 trillion and that of external debt servicing was $3.5 billion, which is about N4.9 trillion.
In effect, approximately N10 trillion is now spent on servicing unproductive debts. The implication is that what we borrowed in a quarter is about N10 trillion and what we spend on debt service, is also about N10 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. “
