Former President Olusegun Obasanjo has lashed out on President Muhammadu Buhari over his external borrowing plan.
Obasanjo spoke yesterday at the first Akintola Williams Annual Lecture in Lagos in a lecture titled “Nigeria yesterday, today and tomorrow: Governance and accountability”.
Criticising the plan, he said “If we borrow some $30bn, in less than three years, we would have mortgaged the future of Nigeria for well over thirty years to come.”
Speaking, he also took a swipe at the Nigerian military, the judiciary and the National Assembly.
This is the first time Obasanjo is openly criticising President Buhari who took office one and a half years ago.
“We immediately need loans to stabilise our foreign reserve and embark on some infrastructure development but surely not $30 billion over a period of less than three years,” Obasanjo said.
“That [$30bn] was about the magnitude of cumulative debt of Nigeria which we worked and wiped out ten years ago.
“Before that debt relief, we were spending almost $3 billion to service our debt annually and the quantum of the debt was not going down.
“Rather, if we defaulted, we paid penalty which was added on,” he added.
He said the projects listed for borrowing are necessary in the medium and long run for the nation’s economy but the government has to prioritise.
“Citing the railway and the Mambilla hydro projects as examples, Obasanjo said they are necessary but cannot pay themselves.
“The argument of concessional, mixed with commercial, does not hold water.
“When the concessional and the non-concessional borrowings are put together, interests alone will be in the region of 3% to 4%.
“The bunching of debt service will be a problem to confront other administrations in future,” the former president said.
“Telling us that those projects will pay themselves cannot be the whole truth,” he added
“We must not be unmindful of internal borrowing either.
“It impacts somewhat differently on the economy but it must not be allowed to crowd out the ability of the private sector to borrow to grow the real economy which is to lead us out of the recession,” he said.
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