Most Of Your Borrowings Lack Economic Common Sense – Peter Obi Fires Tinubu

Former Labour Party presidential candidate Peter Obi has called out the administration of President Bola Tinubu over rising public debt and loan borrowings by the government.

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Obi, in a statement on Thursday, noted that countries should not borrow recklessly without a clear path to repayment through productive investment.

He, however, lamented that most of the borrowings by the Tinubu administration do not satisfy the requirements of law or the requirements of economic common sense.

Naija News reports that the former Governor of Anambra State made the submission against the recent declaration by President Tinubu that debt is not leprosy.

However, Obi submitted that borrowing can both be a leprosy and a killer cancer if not done for the right reasons and properly managed.

He expressed concerns that Nigeria is borrowing for consumption and not production.

He wrote, “Mr. President, borrowing is not only a leprosy, but a killer cancer when it is borrowed for consumption and not production as it is in Nigeria today.

“Borrowing for consumption slowly eats away at the health, reputation, and autonomy of a nation. One of the major “leprosy” afflicting Nigeria today is not just debt, but debt without productivity. Debt that is not tied to measurable economic value. Debt that does not translate into jobs, growth, or improved living standards for the Nigerian people.

“No serious economy borrows recklessly. Nations borrow with discipline, with purpose, and with a clear plan for repayment through productive investment.

“Fiscal Responsibility Act 2007 provides that “Any government in the Federation or its agencies and corporations desirous of borrowing shall, specify the purpose for which the borrowing is intended and present a cost-benefit analysis, detailing the economic and social benefits of the purpose to which the intended borrowing is to be applied”

“Cost-benefit analysis must show how the loan would be applied, how it will impact economic growth and improve the welfare of Nigerian citizens in measurable ways.

“Most of the borrowings by this government do not satisfy the requirements of law or the requirements of economic common sense. The humongous borrowing so far does not show how the projects for the loans enhance the productive capacity of the nation and the welfare of Nigerian citizens.

“These loans are also dangerous because they burden the capacity of the Nigerian state to improve the economy in the future, as we have one of the world’s highest debt servicing ratios. What matters is not debt-GDP as much as debt-debt servicing ratio because the latter constrains our capacity to finance the sectors that drive human development and economic growth.

“If the money is wrongly spent as we do in Nigeria currently, it becomes double jeopardy because you are using current revenue to service debts that did not add to revenue or improve capacity for more production in the future.

“A responsible government does not merely defend borrowing; it explains it, justifies it, and most importantly, ensures it works for the people.

“A new Nigeria is POssible. -PO”