By Rasheed Sobowale
Former Nigerian President, Olusegun Obasanjo who served as a civilian president between 1999 and 2007 has said the nation risks impeding bankruptcy under the present administration of Muhammadu Buhari.
The second elected civilian president of Nigeria while speaking in Lagos at the first edition of the Nigerian Story organised by the ‘Why I Am Alive’ campaign noted that:
“As at 2015, total external debt was about $10.32billion. In four years, our external debt grew to N24.947 trillion or $81.274 billion. ”
The former president stated there is nothing wrong in taking loans to finance growth and development, but according to him such ought to come “with a high degree of discipline, responsibility and foresight”,
His notion was also that the Nigerian government is “notoriously deficient in serious and adequate discipline and most often lack competence and consistency.”
During Obasanjo’s administration, the nation’s GDP growth doubled to 6 per cent until the expiration of his tenure.
The country’s foreign reserves also increased from $2 billion in 1999 to $43 billion in 2007 when he left office.
Obasanjo was also able to secure debt pardons from the Paris and London club amounting to some $18 billion and paid another $18 billion to be debt-free.
Most of these loans were accumulated from short-term trade arrears during the exchange control period.
Obasanjo said his fear is that unlike the situation in the past, the current “creditors are less tolerant of our limitations and inadequacies.”
“As at 2015, total external debt was about $10.32billion. In four years, our external debt grew to N24,947 trillion or $81.274 billion. To service this current level of indebtedness, we must commit at least 50 per cent of our foreign earnings, such a situation tells about an impending bankruptcy because no entity can survive while devoting 50 per cent of its revenue to debt servicing.”
“In 2018, total debt servicing cost took over 60 per cent of government revenue. As if this is not bad enough, we are currently seeking to add another $29.6 billion loan to our already overburdened debt portfolio.”
“Our current budget, out of which we are spending 25 per cent to service debt is not our total earnings, a lot of it is also borrowing. We are borrowing to service what we have borrowed and yet we are borrowing more.”
Considering the decline in oil price, Obasanjo said the situation will get worse and Nigeria may never be able to secure another debt relief and might become the poorest nation in the world.
Encouraging Nigerians to speak up, the former president, Obasanjo said; “For once, all Nigerians need to rise up and shout in one voice and call on the National Assembly to rise up to its core duty and responsibility and save our children and grandchildren and great grandchildren from being mirred in debt.”
“The forecasts now are scary. At the present rate, Nigeria’s population by 2050 will be well over 400 million and Lagos alone will be over 40 million. If we continue as we are going now and as we have gone start and stop in the past, we will be one of the most wretched of the world and maybe the most wretched in Africa.”
Vanguard has reported that President Muhammadu Buhari is seeking a loan of $29.9 billion and that the NASS already promised to grant the application.
An elder statesman and former Governor of Akwa Ibom State, Obong Victor Attah, who also has the same view as Obasanjo faulted the loan decision of the President Muhammadu Buhari administration to develop infrastructure, saying the president should have embarked on restructuring the economy and the nation’s governance structure before seeking more loans.