Former presidential candidate Peter Obi has decried loan requests under President Bola Tinubu, saying the borrowings affect Nigeria’s capacity to progress economically. 

“These loans are also dangerous because they burden the capacity of the Nigerian state to improve the economy in the future, as we have one of the world’s highest debt servicing ratios. What matters is not debt-GDP as much as debt-debt servicing ratio because the latter constrains our capacity to finance the sectors that drive human development and economic growth,” said Mr Obi in a statement on Thursday. 

Mr Obi’s statement came amid public concern over Nigeria’s growing debt burden and the increasing share of national revenue allotted debt servicing.

The former Anambra State governor noted borrowings are destructive especially when done for consumption rather than production.

He said, “Mr. President, borrowing is not only a leprosy, but a killer cancer when it is borrowed for consumption and not production as it is in Nigeria today.

“Borrowing for consumption slowly eats away at the health, reputation, and autonomy of a nation. One of the major “leprosy” afflicting Nigeria today is not just debt, but debt without productivity. Debt that is not tied to measurable economic value. Debt that does not translate into jobs, growth, or improved living standards for the Nigerian people.”

According to Mr Obi, no serious economy borrows recklessly and nations borrow with discipline, purpose and a clear plan for repayment through productive investment.

Citing the Fiscal Responsibility Act 2007 which provides guidelines for borrowings among others in the country, Mr Obi stated that most borrowings under Mr Tinubu did not satisfy the requirements of the law.

“Most of the borrowings by this government do not satisfy the requirements of law or the requirements of economic common sense. The humongous borrowing so far does not show how the projects for the loans enhance the productive capacity of the nation and the welfare of Nigerian citizens,” the politician stated.

Mr Obi lamented that wrongly spent loans jeopardise economic development, urging Mr Tinubu’s government to channel borrowings effectively to improve Nigerians’ lives.

“A responsible government does not merely defend borrowing; it explains it, justifies it, and most importantly, ensures it works for the people,” he noted.