Former President Olusegun Obasanjo on Friday said that Nigeria is rapidly sinking under the weight of foreign and domestic debts.
The Former President made the statement while presenting a paper titled ‘Nigeria: The Challenges of Debt and Sustenance of Democracy.’ as a guest speaker before a largely youthful audience at an event tagged ‘The Nigerian Story, Why I am Alive Campaign’, sponsored by Unity Bank, in Lagos.
Obasanjo said: “There is a dangerous emerging trend today in Africa, and it is eerily familiar with developments on the continent in the 70s.
“Our political leaders have suddenly developed not just a taste for, but a voracious appetite for debt.
“As usual, most of such debts procured are hardly thought through.
“Predictably, ability to repay such debts is lacking. “Unfortunately for us and unlike in the past, the new creditors are less tolerant of our limitations and inadequacies and are now demanding to manage institutions and agencies with a view to recouping their loans.”
“Using debt to finance growth and/or development is a double-edged sword that must be wielded with a high degree of discipline, responsibility and foresight.”
Obasanjo also said defaulting on debt repayment is very easy and convenient, which also favours the creditor.
“Deliquescent behaviour allows the opportunity to impose stipulated sanctions and later appear friendly by offering to restructure your debt.
“At the end of the day, what is done is simply to add to your interest payments and other fees to the principal sum at a high premium.
“So, overnight, a debt of USD$1 million will become $5 million in spite of the fact that you had repaid $1.2 million.
“I say this without fear of contradiction. I have borrowed from banks as a private sector operator and I have borrowed as a political leader, so I believe you would understand my fears and experience about jumbo loans and my agony in getting rid of our external debts and developing a sustainable approach to address our domestic debts.”
He said: “I fear for the future we are bequeathing to our children and to their children and their children s children.