A former vice-presidential candidate of the Peoples’ Democratic Party (PDP), Peter Obi says borrowing for consumption is one of the major contributors to Nigeria’s economic challenges.
Mr Obi, in a series of tweets on Thursday, said Nigeria is spending 90% percent of its revenue in servicing debts because the funds borrowed are mismanaged.
“Our past and continued mismanagement of borrowed funds and borrowing for consumption are the major contributors to the monumental economic challenges confronting Nigeria today.
“Today, we are spending 90% of our revenue servicing debts because, ironically, our borrowed funds were mismanaged and have not been properly invested.
“If the funds borrowed were invested in critical areas of development, education, health and poverty alleviation, Nigeria would have developed far beyond what it is today,” he said.
Obi, who is also a former governor of Anambra State, has repeatedly criticised the Federal Government for borrowing.
He added in his post on Thursday, “There is nothing wrong with borrowing. But what we need to do is to put a law in place that if we must borrow, it must strictly be for investment in areas of growth.
“Many countries have built robust economies with borrowed funds. We can do the same if only we enthrone visionary and committed leadership.”
Obi, in September last year during an interview on Channels Television, said Nigerian citizens are getting poorer because the government is borrowing for the wrong reasons.
He said the nation’s Gross Domestic Product (GDP) cannot be growing while the people are getting poorer.
He believes the growth Nigeria needs is one that “pulls people out of poverty by making the people have disposable income and be able to feed themselves.”
In November 2021, Patience Oniha, the Debt Management Office (DMO) director-general, said public debt was instrumental in helping Nigeria bounce back from the recession.
She said the government understands the need for caution when borrowing, especially with mounting public debt and rapidly increasing debt service obligations.