The Former President of Nigeria, Olusegun Obasanjo, has faulted the federal government’s plan to source fresh external loans.
Obasanjo said the Federal Government was accumulating debts for the next generation, describing it as “criminal.”
Recall that last Tuesday; President Muhammadu Buhari submitted a request to the National Assembly for approval to obtain fresh external loans of $4.054 billion and €710 million.
Reacting to this, the former president, who spoke to Channels TV on the sidelines of an event in South Africa, said that if the existing debt is left serviced or unpaid, it might become a problem for successive administrations.
Obasanjo said that borrowing is not a problem, what could be a problem would be what one is borrowing for and the plan or capacity to pay back.
“If you want to build a commercial house and you go and borrow money, and you have 50 percent of your own money, and you borrow 50 percent and in five years, you pay the 50 percent that you borrowed. That is a wise thing to do,” he said.
“But if you have to go and borrow money for you to be able to feed yourself and your family, that is a stupid thing to do.
“So, 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?
“But we are borrowing and accumulating debt for the next generation and the next generation after them, it is criminal, to put it mildly. What are we borrowing for?,” he asked.
He said during his tenure in 1999, the country was spending $3.5 billion to service debts that kept on increasing.
Obasanjo said, “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.”
