Labour Party presidential candidate in the 2023 general election, Peter Obi, has expressed concern about Nigeria’s rising debt while criticising the Federal Government for its continuous borrowings.
Obi expressed this concern in a series of tweets on his X handle on Tuesday, saying the loans have not affected Nigeria positively.
“I remain concerned about our borrowings, considering their galloping rate over the years, and its concomitant effects on the economy,” stated Obi.
“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.”
Obi lamented that last year, 2023, Nigeria’s 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.
He said in effect, approximately N10 trillion is now spent on servicing unproductive debts with the implication that what the nation borrowed in a quarter is about N10 trillion and what was spent on debt service, is also about N10 trillion.
Obi stated that he is worried that 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).
He appealed to the government to de-accelerate the borrowing, and let Nigeria 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,” added Obi.
Nigeria’s public debt stock as at December 31, 2023 was N97. 341 trillion (108.229 billion dollars), according to data released by the Debt Management Office (DMO) in Abuja last week.
The DMO said that the amount comprised domestic and external debt stocks of the Federal Government, the 36 states governments and the Federal Capital Territory (FCT).
The debt office said that there was an increase of N9.43 trillion over the comparative figure for September 30, 2023.
It said that the increase was largely due to new domestic borrowing by the Federal Government to part – finance the deficit in the 2024 budget, and disbursements by multilateral and bilateral lenders.
