Peter Obi, a prominent Nigerian opposition figure and former governor of Anambra State, has strongly criticized President Bola Tinubu's borrowing policy, warning that debt used to fund consumption rather than production is damaging the country's economic future. In a post on X on Thursday, Obi described such borrowing as both a leprosy and a killer cancer, emphasizing that it slowly erodes the health, reputation, and autonomy of the nation.
Borrowing for Consumption vs. Production
Obi argued that responsible economies borrow with discipline, tying loans to investments that generate growth, create jobs, and improve living standards, with clear plans for repayment. He contrasted this with Nigeria's current approach, which he says lacks productive value. According to Obi, borrowing without a clear link to productivity is detrimental to the country's long-term economic health.
Legal and Economic Concerns
The former Labour Party presidential candidate cited Nigeria's Fiscal Responsibility Act 2007, which requires governments to state the purpose of borrowing and provide a cost-benefit analysis demonstrating economic and social returns. Obi contended that much of the current borrowing fails to meet these legal requirements and economic common sense, with little evidence that it enhances productivity or improves citizens' welfare.
He also warned that Nigeria's high debt-servicing burden, which is among the highest globally, limits the government's ability to invest in key sectors such as education, healthcare, and infrastructure. Obi stressed that the debt-servicing ratio is more critical than the debt-to-GDP measure, as it constrains the capacity to finance human development and economic growth.
Double Jeopardy of Misguided Spending
Obi emphasized that if borrowed money is wrongly spent, as he believes is currently the case in Nigeria, it creates a double jeopardy: the government uses current revenue to service debts that did not add to revenue or improve capacity for future production. He called for responsible governance that not only defends borrowing but explains it, justifies it, and ensures it works for the people.
The criticism comes amid ongoing debates about Nigeria's fiscal policies and the government's approach to managing public debt. Obi's remarks highlight growing concerns among opposition figures and economists about the sustainability of borrowing for consumption without corresponding productive investments.
