Peter Obi: N10trn being spent on servicing Nigeria’s ‘unproductive’ debts

Peter Obi, former governor of Anambra state, says N10 trillion is spent by the federal government on ‘unproductive’ debts.

Obi, the presidential candidate of Labour Party (LP) in the 2023 election, expressed his concern in a post on his X page on Tuesday.

“Last year, 2023, our total debt servicing for domestic debts stood at N4.4 trillion and that of external debt servicing was $3.5 billion, which is about N4.9 trillion. In effect, approximately N10 trillion is now spent on servicing unproductive debts,” he said.

According to Obi, the implication is what the country borrowed in a quarter is “about N10 trillion and what we spend on debt service, is also about N10 trillion”.

He said each of the figures is more than the combined budgetary allocation for the “four highest priority areas”, including defence (N3.25 trillion), education (N2.18 trillion), health (N1.33 trillion), and infrastructure (N1.32 trillion).

The Debt Management Office (DMO), on March 22, said Nigeria’s total public debt rose to N97.34 trillion, by N9 trillion, in the fourth quarter (Q4) of 2023.

According to DMO, the increase was primarily due to new domestic borrowing by the federal government to partly fund the deficit in the 2024 budget as well as disbursements by multilateral and bilateral lenders.

Speaking further, Obi said the country’s borrowings bother him, considering the rapidly increasing rate over the years, and its attendant effects on the economy. 

“More worrisome is the fact that there has been no corresponding visible usage or investments as required by the law, to show their impact on the nation’s development,” he said. 

“At the end of the second quarter, Q2, of 2023, our debt stood at N87.9 trillion, which was very disturbing to us, because we were at a loss as to what we did with the huge debt, especially the over N23 trillion ways and means borrowed by the last administration, which for me, would have been the end of borrowing without any visible and corresponding investment and benefit to the nation. 

“But sadly and more worrisome is the fact that between the end of the third quarter, Q3, and the end of the fourth quarter, Q4, of 2023, about N10 trillion was added to our debt portfolio , which has now taken our debts to N97.3 trillion, again, without any corresponding visible and verifiable utilization.This is the highest ever borrowed in one quarter.”

He asked the the federal government to de-accelerate borrowings and re-evaluate what has been achieved with previous funding.

Obi said the evaluation would help the government make better decisions for the good of the nation.