The Presidency and one of the leading presidential aspirants on the platform of the opposition African Democratic Congress (ADC), Peter Obi, on Thursday traded words over borrowings by the Federal Government.
The exchange came after President Bola Ahmed Tinubu defended the administration’s borrowing profile, stating that “borrowing is not leprosy.”
Reacting on his X handle, Obi said, “Mr President, borrowing is not only leprosy, but a killer cancer when it is borrowed for consumption and not production as it is in Nigeria today.”
He said one of the major “leprosy” afflicting Nigeria today is not just debt, but debt without productivity.
The 2023 presidential candidate of the Labour Party (LP) argued that no serious economy borrows recklessly, stressing that nations borrow with discipline, purpose, and a clear plan for repayment through productive investment.
Part of the post titled “When Borrowing is Leprosy and Cancerous” read:
“Borrowing for consumption slowly eats away at the health, reputation, and autonomy of a nation.
“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.
“The 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-to-GDP as much as 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.”
In a swift response on his X handle @aonanuga1956, the presidential spokesman, Bayo Onanuga, advised Obi to rise above what he described as a pedestrian level and address national issues with rational argument, not emotional reactions on social media.
Onanuga said the administration has been borrowing to finance much-needed infrastructure, not consumption.
“Mr Peter Obi, you have come again with your demagoguery. What point are you trying to make about borrowing? Every sovereign nation borrows, and as President Tinubu rightly said, borrowing is not leprosy. If you must know, this administration has been borrowing to finance much-needed infrastructure, not consumption.
“The fact that we are receiving funds and have willing lenders shows that our country is credible and capable of repaying. As a politician, you need to rise above the pedestrian level and address issues of the day with rational argument, not emotional reactions on the streets and Twittersphere,” he tweeted.
tribuneonlineng.com
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