Nigeria risks impending bankruptcy if the country’s current debt level is left unchecked by the present administration, former President, Olusegun Obasanjo has warned.
Obasanjo gave the warning while delivering his keynote speech at an event in Lagos tagged “The Nigerian Story, Why I am Alive Campaign”.
The former President said as of 2015, Nigeria’s total external debt was about $10.32 billion but by March 2019, it had risen to $81.274 billion. This he says makes him worried about the future generations who would have to pay such loans.
“Our political leaders have suddenly developed not just a taste for, but a voracious appetite for debt. As usual, most of such debts procured are hardly thought through. Predictably, ability to repay such debts is lacking,” he said.
“Unfortunately for us and unlike in the past, the new creditors are less tolerant of our limitations and inadequacies and are now demanding to manage institutions and agencies with a view to recouping their loans.
It has recently been pointed out that in 2018 that total debt servicing took over 60 per cent of government revenue. What’s more, we are not doing enough to address the fundamental, deep-seated and structural challenges that inhibit the expansion of our economy.
“Such a situation talks about an impending bankruptcy. No entity can survive while devoting 50 per cent of its revenue to debt servicing.”
Obasanjo, who served as a democratic president between 1999 and 2007, said to worsen matters, the present government is currently seeking to add another $29.6 billion loan to the already “overburdened debt portfolio.”
Meanwhile, the President Muhammadu Buhari led administration has severally dismissed reports that Nigeria is in a debt crisis.