Obasanjo raises alarm over Nigeria’s escalating debt, warns of impact on future generation

Former President Olusegun Obasanjo has expressed deep concern over Nigeria’s rapidly increasing debt, calling it a critical issue that threatens the nation’s present and future generations.

He made these remarks during a recent virtual event, “Boiling Point Arena,” where he emphasized the need for urgent reforms to address the nation’s fiscal challenges.

Nigeria’s total debt surged by ₦12.6 trillion in just three months, reaching ₦134.3 trillion ($91.3 billion) by the end of Q2 2024. This represents a 10.35% increase from the ₦121.7 trillion recorded in the previous quarter, raising alarms among economic analysts and stakeholders.

Reflecting on the current debt situation, Obasanjo said: “Yes, I was able to secure debt forgiveness for the nation before I left office, but our present debt profile is a problem for both this and the next generation.”

Obasanjo’s administration was instrumental in securing an $18 billion debt relief from the Paris Club in 2005, reducing Nigeria’s debt burden and creating fiscal space for development.

However, he lamented the return to unsustainable borrowing, which he believes undermines progress.

Obasanjo drew comparisons to countries like South Korea and Singapore, attributing their development to leadership rooted in meritocracy and integrity. He emphasized that effective anti-corruption measures must start at the top:

“The best way to fight corruption is from the top. In South Korea, their leaders make appointments based on merit, and that has become the country’s legacy.”

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He argued that adopting similar practices in Nigeria could lead to significant improvements in governance and economic management.

Experts warn that Nigeria’s rising debt, compounded by high interest payments and a depreciating naira, could limit the government’s ability to invest in critical infrastructure and social services.

Analysts have also raised concerns about the sustainability of the current debt-to-GDP ratio, which continues to edge closer to alarming thresholds.

Obasanjo’s comments come as a clarion call for Nigeria’s leadership to adopt more prudent fiscal policies and prioritize reforms that ensure transparency and accountability.

With the nation at a crossroads, his message underscores the urgency of addressing systemic challenges to secure a stable and prosperous future.

As Nigeria’s debt continues to climb, stakeholders across sectors are calling for decisive action to prevent a fiscal crisis and protect the welfare of future generations