Former President Olusegun Obasanjo has expressed concerns over Nigeria’s and other African countries’ ability to secure debt relief due to their large debt profiles. Obasanjo, who secured debt relief for Nigeria in 2003 during his tenure, claimed that the relief was mismanaged by successive administrations, leading to the country’s significant and undeserved debt burden.
Nigeria’s public debt reached N87.91 trillion as of September 2023, according to the Debt Management Office, further exacerbating the challenges faced by the country. Obasanjo warned that the mismanagement of previous debts made it almost impossible for any administration to secure similar gestures in the continent.
During an event with the 2023 awardees of the Future Africa Leaders Foundation, He emphasized the need for responsible leadership, describing debt as a trap that individuals and countries should avoid falling into. He pointed out that the current generations might have to bear the brunt of the debts being incurred by different countries in Africa.
In 2005, Obasanjo and the Paris Club finalized an agreement for debt relief worth $18 billion, reducing Nigeria’s debt stock by $30 billion. However, the former president now contends that mismanagement has undermined the benefits of that relief.
Obasanjo also expressed hope for Nigeria’s socio-economic improvement in four years through prayers and thanksgiving. He encouraged gratitude to God, stating that, despite the challenges, things might turn around for the better.
Economists and analysts reacted to Obasanjo’s comments, blaming the Federal Government for re-accumulating large debts after the efforts made during Obasanjo’s administration. Concerns were raised about the sustainability of Nigeria’s debt, with experts urging the government to focus on revenue generation rather than continued borrowing.
The Debt Management Office reported that Nigeria’s total public debt stood at N87.91 trillion, with both external and domestic debts contributing to the burden. While the debt stock remains within sustainable limits, experts highlighted the need for fiscal consolidation and increased revenue to support debt servicing.
The Minister of Finance, Wale Edun, recently emphasized the government’s commitment to reducing reliance on borrowing and increasing revenue. The challenges of debt sustainability pose risks to the Nigerian economy, requiring careful management and financial reforms.