Peter Obi, former Labour Party presidential candidate, has voiced significant concerns over Nigeria’s borrowing practices, highlighting the lack of tangible benefits despite the country’s escalating debt profile. This criticism comes in the wake of the Debt Management Office’s (DMO) recent report, which revealed a sharp increase in Nigeria’s public debt to N97.3 trillion by the end of 2023. Obi’s remarks underscore the urgency of reevaluating government borrowing strategies to ensure national economic stability and growth.
Mounting Debt and Economic Implications
According to the DMO, Nigeria’s public debt saw a 10 percent increase, reaching N97.3 trillion, with domestic debt accounting for N59.12 trillion and external debt at N38.22 trillion. Obi pointed out that in 2023 alone, Nigeria expended a staggering N10 trillion on servicing these debts, a figure he deems ‘unproductive’ and alarmingly high. He stressed that such expenditure on debt servicing surpasses the combined budget allocations for critical sectors including defence, education, health, and infrastructure, which collectively amount to less than the N10 trillion mark.
Call for Strategic Borrowing
Obi’s critique extends beyond the mere accumulation of debt; he is calling for a comprehensive review of how previous loans were utilized and emphasizes the need for a strategic approach to borrowing. The former Anambra governor argues that the government’s borrowing spree has not translated into visible investments or developmental gains for the country. He advocates for a shift from consumption-driven to production-oriented economic policies, suggesting that such a transformation is critical for Nigeria’s economic revival.
Future Implications and Recommendations
The escalating debt profile of Nigeria poses significant challenges for the nation’s economic sustainability and development. Obi’s comments serve as a wake-up call for the government to reassess its borrowing habits and focus on productive, growth-inducing investments. Without a deliberate shift in borrowing strategy and expenditure prioritization, Nigeria risks entrenching itself in a cycle of debt that could hinder future generations. It is crucial for policymakers to heed these warnings and implement measures that will steer the country towards a more prosperous and debt-free future.
