Former President Olusegun Obasanjo has warned that Nigeria may be heading to bankruptcy, if it continued in its habit of borrowing to service debt and borrowing more.
Obasanjo handed this warning as a keynote speaker at the “Why I am Alive” campaign celebration in Lagos on Friday.
According to him, there is a dangerous emerging trend today in Africa and it is eerily familiar with developments on the continent in the 70s.
Our political leaders he stated, have suddenly developed not just a taste for, but a voracious appetite for debt.
Nigeria’s external debt, he said, grew by as much as 700 percent to N24.947 trillion ($81.2.74 billion), from $10.32 billion in just four years, meaning that the country would have to commit half of its foreign earnings to servicing its current level of indebtedness.
“Such a situation talks about impending bankruptcy,” the former president warned. He insisted that “no entity can survive while devoting 50 percent of its revenue to debt servicing.”
He explained that the current budget out of which Nigeria spends 25 percent to service debt “is not the country’s total earning; a lot of it is also borrowing. Simply put, we are borrowing to service what we have borrowed and yet we are borrowing more.
“I do not need the brain of any genius to conclude that those who use statistics to dig us deeper into debt are our enemies: statistics can be used to serve any purpose, and that is why Winston Churchill talked of lies, damn lies and statistics, meaning statistics can be made master of lies.”
Calling for national dialogue or debate on Nigeria’s short, medium and long-term plans as a nation, Obasanjo said his biggest worry was that, with the scale of debts the country was walking into, “there are already fiscal challenges to meet(ing) our obligations.”
He expressed deep worry about the future of Nigerian youths.
His words: “ I fear for the future we are bequeathing to our children and to their children and their children’s children.
“ I believe that it will be foolhardy, irresponsible and wicked for us to tie a mill stone of debt around the neck of the successor generations of Nigerians.
“We need to take hard and important decisions that will facilitate a balanced allocation of resources to both capital and recurrent expenditures.”
Obasanjo, who was twice head of the Nigerian government in both military and civilian capacity between 1976 and 2007, was a special guest of the “Why I am Alive” campaign celebration tagged “The Nigerian Story” created by media personality and chief executive of Eureka Productions, Caroline Moore in Lagos on Friday.
He paid off all external debts of Nigeria and has been very critical of governments since he left office after completing two terms of four years each as a civilian president in 2007.
Pastor Itua Ighodalo, who moderated the Friday session, said the campaign was “designed to empower young Nigerians for the future by tapping into the key lessons from success stories of eminent personalities that have contributed to the social, economic and political growth of Nigeria.”
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