No entity can survive devoting 50 per cent of its revenue to debt servicing – Obasanjo
Cheif Olusegun Obasanjo for President of Nigaria has said that ‘no entity can survive while devoting 50 per cent of its revenue to debt servicing.’
Obasanjo speaking at the “Why I am Alive” campaign on Friday in Lagos tagged ‘The Nigerian Story,’ said in 2015, Nigeria’s total external debt was about $10.32bn but in March 2019, Nigeria’s external debt had increased to $81.274bn,
He lamented that to service this current level of indebtedness, Nigeria must commit at least 50 per cent of its foreign earnings.hence he said: ‘such a situation talks about an impending bankruptcy. No entity can survive while devoting 50 per cent of its revenue to debt servicing,”
He said ‘my agony in getting rid of our external debts and developing a sustainable approach to address our domestic debts.”
Obasanjo said: ‘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.’
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Obasanjo speaking on President Muhammadu Buhariu’s loan request of $29.6bn to the National Assembly for infrastructural development said such will be an ‘overburdened to our debt portfolio’
However, Obasanjo said although debt could be used to finance growth and/or development, he said it was a “double-edged sword” that must be wielded with a high degree of discipline, responsibility and foresight.
He said, “A well-calibrated debt for infrastructure and other developmental goals could be very positive. However, we do not need to speculate. We need to examine our historical experience.
“Everyone knows that our governments are notoriously deficient in serious and adequate discipline and most often lack competence and consistency as well.”
Obasanjo said Nigeria borrowed to build a light rail in Lagos but a governor abandoned the project during his full term of four years at 65 per cent completion – when the country should have started paying down on the loan.
He said this type of situation was not in Lagos alone but in other states like Rivers and Cross River.
He also said, “The Federal Government built a nice looking extension to the Murtala Mohammed International airport that looks completed from outside but not in service.
“To rub ‘aboniki’ on the injury, some clowns are talking of demolishing the main airport and rebuild from scratch. Where on earth is a poor country wasting resources that way?”
He said, ‘I
‘To now see all those efforts, go to waste barely less than 15 years after that watershed moment is more than disturbing. It is painful and retrogressive.
‘Nigeria’s leadership was key in the campaign for debt relief in the late 90s/early 2000s. Our relapse into debt will be wrong, signalling to the rest of the continent and could be tantamount to backing the entire continent into another era of ‘highly-indebted poor countries.’”
‘For once, all Nigerians need to rise up and shout in one voice and call on the National Assembly to rise up to its core duty and responsibility and save our children and our grandchildren and great-grandchildren from being mired in debt.
‘Let us use other options. Saudi Arabia, I understand, will be raising over $20bn to finance projects through private equity. We can do likewise.
‘We have several national assets that could be used to raise some of the funds that we need in this
‘There are even more discoveries outside of Africa that have given better attractions to international oil and gas investors. There are alternatives in the wind, solar and other forms of energy that are becoming cheaper by the day with ever-improving technology in these areas.
“The issue of climate change is daily making oil and gas less important than they had been up till now. Electric cars and solar-driven forms of means of mobility and transportation will make oil and gas more in the ground than being exploited for transportation.”
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