Borrowing for consumption is Nigeria’s major challenge, says Peter Obi

Peter Obi, former governor of Anambra, says borrowing for consumption is Nigeria’s major challenge.

He said this in a tweet on Thursday.

According to him, the country can borrow funds but they should be used wisely for investment. 

He said the mismanagement of borrowed funds has cost the country so much, hence the government should enforce a law to regulate borrowing. 

“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,” he wrote.

“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.

“Many countries have built robust economies with borrowed funds. We can do the same if only we enthrone visionary and committed leadership.”

In November 2021, Patience Oniha, the Debt Management Office (DMO) director-general, said public debt was instrumental in helping Nigeria bounce back from recession.

She said government understands the need for caution when borrowing, especially with mounting public debt and rapidly increasing debt service obligations.