Obi Expresses Fear As Nigeria’s Debt Hits N97.34tn

The 2023 presidential candidate of the Labour Party, Peter Obi, has expressed concern over Nigeria’s rising debt burden.

Obi said a significant portion of the debts which has surged to N97.34tn is not channeled towards production, describing it as both excessive and troubling.

Last week, the Debt Management Office (DMO) of Nigeria disclosed that Nigeria’s public debt rose to ₦97.34trn ($108bn) as of the fourth quarter of 2023.

He expressed dismay at the utilization of nearly N10tn to service unproductive debts, labeling it as detrimental to economic growth.

In a series of tweets via his X handle on Tuesday, Obi expressed his fears about the country’s borrowing activities and their potential adverse effects on the economy.

He highlighted the alarming trajectory of Nigeria’s debt, citing a sharp increase from N87.9tn in the second quarter of 2023 to N97.3tn by the end of the fourth quarter of the same year.

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.

“At the end of the second quarter, Q2, of 2023, our debt stood at N87.9 trillion, which was very disturbing to us, because we were at a loss on what we did with the huge debt, especially the over N30 trillion ways and means borrowed by the last administration, which for me, would have been the end of borrowing without any visible and corresponding investment that will benefit the nation.

“Even more worrisome is that between the end of the third quarter, Q3, and the end of the fourth quarter, Q4, of 2023, about N10 trillion was added to our debt profile, which has now taken our debts to N97.3 trillion, again, without any corresponding visible and verifiable utilization of such debts, to the and best of my knowledge, is the highest ever borrowed in one quarter.

“Last year, 2023, our total debt servicing for domestic debts stood at N4.4 trillion and that of external debt servicing was $3.5 billion, which is about N4.9 trillion. In effect, approximately N10 trillion is now set aside to service 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.”

Obi called for re-evaluation of the government’s borrowing strategy, urging a more prudent approach that prioritizes accountability and productive investment.

He urged the government to exercise restraint in borrowing and advocated for a thorough assessment of previous loans to inform future decisions in the nation’s best interest.

Obi reiterated his vision for a New Nigeria characterized by responsible fiscal management and a shift from consumption-driven to production-oriented policies.

“My appeal to the government of our nation is to please de-accelerate the borrowing, and let us first re-evaluate to see what has been achieved with our previous loans so far and be able to make better decisions for the good of the nation.

“In the New Nigeria of our dream, our scarce resources will not only be duly accounted for but will be productively and prudently managed in moving our nation from consumption to production,” Obi stated.