- FG Borrowing Recklessly for Consumption -Peter Obi
Peter Obi, former governor and PDP’s 2019 Vice Presidential candidate, on Thursday said the Nigerian nation is borrowing recklessly for consumption.
In his interview on Arise TV, Obi said the nation has failed to effectively implement previous borrowings or convinced Nigeria why an additional $22.7 billion loan is necessary.
He explained that the more Nigeria borrows, the worse the economic projections, adding that the government has been borrowing “recklessly for consumption” and not to expand the economy enough to up revenue for repayment.
“Everybody knows my stand on borrowing. I am against reckless borrowing and borrowing for consumption. If you must borrow, you must be able to prove the business case of the borrowing convincingly, otherwise, you are mortgaging the future,” Obi said.
“All the funds that have been borrowed for long in the country have not impacted positively on the growth of Nigeria’s economy, meaning that they were reckless and intended for consumption.
“Even using Kenya & Ghana in Africa, for example, both are borrowing like us. But the difference is, in 2010, Ghana’s GDP was 32 billion US Dollars, with per-capita of $1320, in 2019 its GDP had grown to $64.5 bil“In 2010, when we started…all these borrowings, our per capita was 2,300. Today, it is 1,920. So, something is missing. The more we borrow, the worse our economy, which means we are not investing this money.“We have borrowed in Nigeria, call it from 2008 till date, we’ve been able to borrow, where our debt has now increased to almost a $100bn. What can we show for all these debt?“No country borrows a quarter of its GDP without showing tangible investments or projects into which the borrowed funds would be deployed.”
Speaking on low oil price, Obi said: “Our position is very very very serious. That is why they have set up an emergency team to look at the issue,” he said.
“Have you tried to cut down on your expenses. I’ve said it before that the cost of governance in Nigeria is too much.
“What is even worse is that people like me, the political leaders, are not even seeing that we are in crisis and behaving and conducting ourselves as if we are in crisis. We are still moving around with our long robes, long convoys, having all sorts of parties as if things are normal.”