Obasanjo Faults N88tn Debt Burden, Says Relief Mismanaged

Former President Olusegun Obasanjo says Nigeria and other African countries may find it difficult to secure debt relief considering their large debt profiles.

Obasanjo also indicated that the debt relief secured by Nigeria from the Paris Club during his tenure was allegedly mismanaged successive administrations, a situation that has plunged the country into huge and undeserved debt.

Nigeria’s public debt was N87.91tn as September, 2023, according to the Debt Management Office.

As a result, he noted that it might be impossible for the next generations of Africans to enjoy debt relief again considering the mismanagement on the continent.

In 2003, Obasanjo secured a debt relief for Nigeria.

In October 2005, Nigeria and the Paris Club announced a final agreement for debt relief worth $18bn and an overall reduction of Nigeria’s debt stock by $30bn.

The deal was completed on April 21, 2006, when Nigeria made its final payment, and its books were cleared of any Paris Club debt.

The former President, according to a statement on Wednesday by his Special Assistant on Media, Kehinde Akinyemi, disclosed this during an event with the 2023 awardees of the Future Africa Leaders Foundation, an initiative of Pastor Chris Oyakhilome.

Obasanjo described debt as a trap that no individual or country should fall into. While noting that leadership was the number one problem facing the continent, the former president added, “The coming generations will have no choice but to pay the current debt being incurred by different countries in the continent.”

Commending Oyakhilome for his effort in building leaders, he said, “A leader should be able to set good examples, be bold and courageous when making decisions, accepting mistakes and learning from them as well as having a realistic dream.”

According to the Debt Management Office, Nigeria’s total public debt rose to N87.91tn as of the end of the third quarter of 2023. Based on the data, total external debt stood at N31.98tn and domestic debt amounted to N55.93tn as of the period being reported.

Total domestic Federal Government debt stood at N50.19tn and states and the FCT was N5.74tn.

Commenting on the total debt, DMO said, “The servicing of the debts in addition to other debts, are clear demonstrations of the FGN’s commitment to honouring its debt obligations.”

In its Report of the Annual National Market Access Country Debt Sustainability Analysis, DMO noted that the country’s debt stock is within sustainable limits at 37.1 per cent (at the time) but is approaching a point where it has little space for borrowing.

Conscious of the dangers of continued borrowing, the Minister of Finance and the Coordinating Minister of the Economy, Wale Edun, recently stated that the Federal Government is committed to shifting focus towards revenue and away from borrowing.