Nigeria Needs Economic Re-Engineering To Avoid Bankruptcy – Obasanjo

Former President Olusegun Obasanjo

BEVERLY HILLS, December 28, (THEWILL) – Former President Olusegun Obasanjo has declared that the nation is on the verge of bankruptcy and that it would take a great economic reengineering to avert this.

Speaking against the massive borrowing that the nation has embarked upon in recent time, Obasanjo said that the implication of piling debts is that the country would have to commit half of its foreign earnings to servicing it.

He raised the alarm that with an external debt of $81.274 billion as curtains fall on 2019, the nation’s debt grew by as much as 700 per cent to N24.947 trillion ($81.274 billion), from $10.32 billion in just four years (2015).

The former president, who spoke at an event, the ‘Why I am Alive Campaign’ organised by Pastor Itua Ighodalo, in Lagos, expressed pity on the future generations of the country who would take the brunt of paying for the debt.

He explained that the current budget out of which Nigeria spends 25 per cent 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.

“Our political leaders have suddenly developed not just a taste for, but a voracious appetite for debt. As usual, most of such debts that are procured are hardly thought. Predictably, the ability to repay such debts is lacking.

“We can extrapolate from this to decide the future impact on our already compromised sovereign existence. Current prognosis suggests that things might get worse.”

Of particular concern to Obasanjo was what he described as government’s “notorious deficiency in ‘serious and adequate discipline’ as well as lack of competence and consistency.”

“We borrowed to build a light rail in Lagos, embarked on the project and a succeeding governor abandoned the project for his full term of four years at 65 per cent completion when he should have started paying down on the loan.

“This light rail is important for the whole of Nigeria not only with respect for man-hours of Gross Domestic Product (GDP) that would have continued to be saved but because such loans are federally guaranteed.

“At the same time, there are bus terminals that were presidentially declared open but not used. This type of situation was not in Lagos alone but variously in other states like Rivers and Cross River. And the problem is not limited to states.”

Obasanjo kicked against alleged plans to demolish the Murtala Muhammed International Airport and rebuild from the scratch. He noted that procuring debt required clarity of purpose which must be linked with the ability to repay principal and interest as and when due.