Rising debt profile: Peter Obi chides FG over ‘unproductive’ borrowings

• The former Anambra governor said the last administration plunged the country into massive debt especially with the N30 trillion ways and means from the central bank

The former presidential candidate for the Labour Party, Peter Obi has bemoaned the ballooning debts profile of Nigeria.

In a statement via his verified X handle on Tuesday, Obi stressed that there needed to be a review of what the loans taken were used for.

Obi, who described the Nigerian government borrowings as unproductive, pointed out that Nigeria’s public debt keeps increasing with little or no impact on the country’s economy.

The former Anambra governor said the last administration plunged the country into massive debt especially with the N30 trillion ways and means from the central bank.

He noted that the last administration could have ended the nation’s borrowings, adding that the debt did add any value to the country or positively impact the lives of the people.

Obi said, “I remain concerned about our borrowings, considering their galloping situation over the years, and its concomitant effects on the economy.

“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.”

Obi’s reaction comes against the backdrop of the country’s rising debt profile as contained in a report released by the Debt Management Office (DMO) last week.

According to the DMO, Nigeria’s public debt stock increased by 10 percent hitting N97.3 trillion by the end of 2023.

The Office noted that the N97.3 trillion public debt comprises domestic debt of N59.12 trillion and external debt of N38.22 trillion.

Meanwhile, Obi noted that in 2023, Nigeria spent huge amounts totaling N10 trillion in servicing both domestic and external debt which he described as “unproductive debts”.

“The implication is that what we borrowed in a quarter about N10 trillion and what we spend on debt servicing, which is also about N10 trillion, are each more than the combined budgetary allocation for the four highest priority areas, which are; defence (N3.25trn), Education (N2.18trn), Health (1.33trn), and Infrastructure (N1.32trn),” he said.

Obi said the government should “de-accelerate” its borrowings while an assessment of what the previous loans have been used for should be looked into to stem the tide of increasing debt profile