Following the recent plan by the Federal Government to acquire a $5 billion loan, former Nigerian President Olusegun Obasanjo, has condemned the proposed action, stating that it is criminal and will definitely become a problem for the next generation.
The elder statesman who spoke with Channels TV after an event in South Africa, said that the loans, if left unpaid will result in a cascade of crisis for future administrations.
The former Nigerian leader noted that, while borrowing is not a problem, the purpose of the loans and the ability to pay back is the bone of contention.
He said: “But if you are borrowing and accumulating debts for the next generation and the next generation after them, it is criminal. What are you borrowing for?” Obasanjo asked.
“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?”
Obasanjo noted that during his tenure in 1999, Nigeria was spending $3.5 billion to repay debts that kept on increasing.
“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.”
Gen Olusegun Obasanjo’s concern is borne of the proposed plan by the Buhari-administration to seek foreign loans for the implementation of infrastructural projects across the country.
Few days ago, President Muhammadu Buhari wrote to the National Assembly, seeking their approval to acquire new loans of $4,054,476,863 and €710 million in addition to the 2018-2020 borrowing plan.
In the letter, the President explained that owing to “emerging needs”, there is a need to raise more funds for some “critical projects”, while seeking the parliament’s nod to also approve grant components of $125 million.
The request was in a letter read by Senate President Ahmad Lawan on the floor of the upper legislative chamber on Tuesday.
In July, the national assembly approved the sums of $8.3 billion and €490 million loans contained in the initial 2018-2020 borrowing plan.
