Obasanjo accuses Buhari of incurring debts

Former President Olusegun Obasanjo, has warned President Muhammadu Buhari to stop taking external loans as his administration is accumulating debts for the future generations.

Obasanjo who spoke on Sunday at an event in South Africa, faulted the federal government’s plan to source fresh external loans, insisting that if the existing debts are left unserviced or unpaid, it might become a problem for successive governments.

Also Read: President Buhari requests more external loans

He added that the “FG was accumulating debts for the next generation, which is a criminal act.”

While noting that borrowing is not in itself a problem, the former president said that the problem with such massive borrowing is when there are no specific plans or the capacity to pay back

“If you want to build a commercial house and you go and borrow money, and you have 50 percent of your own money, and you borrow 50 percent and in five years, you pay the 50 percent that you borrowed. That is a wise thing to do,” he said.

However, the former leader said borrowing for recurrent expenditure is the height of folly for any nation, or even as an individual.

“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 folly. If we are borrowing for development that can pay for itself, that is understandable. Then the payment, how long will it take to 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 came into government and was elected President, we were spending $3.5bn to service debt, and even with that, our quantum of debt was not going down.”