Borrowing For Recurrent Expenditure Is Foolish, Says Former President Of Nigeria, Olusegun Obasanjo.

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Former Nigerian President Olusegun Obasanjo frowned at the way the federal government took loans. Loans for recurring expenditure is “foolish” according to the former president.

In a video interview posted on Channel Television’s Facebook page, Obasanjo said it was criminal to borrow and collect debts for future generations.

He said, “If you want to build a commercial house and you go and borrow money, and you have 50 per cent of your own money and you borrow 50 per cent and in five years, you pay the 50 per cent that you borrowed. That is a wise thing to do. But if you have to go and borrow money for you to be able to feed yourself and your family, that is a stupid thing to do.”

“So, if we are borrowing for recurrent expenditure, it is the height of foolery. If we are borrowing for development that can pay itself, that is understandable; then how long will it pay itself? But we are borrowing and accumulating debt for the next generation and the next generation after them, it is criminal, to put it mildly. What are we borrowing for?”

“When I walked into government and was elected president, we spent $3.5 billion on debt repayments, and even that didn’t reduce our debt.”

The administration of the President, Major General Muhammadu Buhari (retd.), has borrowed a total of N21 trillion in six years.

Data from the Debt Management Office shows that Nigeria’s national debt totaled N33.12 billion at the end of March 2021, meaning the country’s national debt has increased by N21 trillion over the past six years under the presidency.

At the end of June 2015, one month after the current regime came into effect, the country’s debt profile was N12.12 trillion.

This also means that the country’s debt has increased by 173.27% over a six-year period.

Nigeria’s national debt includes the debts of the federal government, 36 states, and the Federal Capital Territory.

Most of the debt, however, were approved by the federal government.

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