Obi Warns Tinubu: Loans for Non-Essential Spending are a 'Deadly Disease

Peter Obi, a former presidential candidate, has condemned Nigeria's borrowing pattern, cautioning that debt accumulation without productive investment poses a significant threat to the country's economic future.

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In a statement released on his X account on Wednesday, Obi likened borrowing for consumption to a "killer cancer" that undermines a nation's economic well-being, emphasizing the dangers of such a practice.

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Obi's statement warned that "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," highlighting the need for borrowing to be tied to productive purposes.

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He identified one of Nigeria's major challenges as not only rising debt but also borrowing that lacks measurable economic value, job creation, or improved living standards, stressing that "debt that is not tied to measurable economic value" is particularly problematic.

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Obi further noted that "debt that does not translate into jobs, growth, or improved living standards for the Nigerian people" is a significant concern, emphasizing the need for borrowing to be linked to tangible economic benefits.

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He emphasized that responsible economies borrow with discipline and clear repayment plans linked to productive investments, but Nigeria's approach falls short of these standards, according to Obi.

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The Fiscal Responsibility Act 2007, cited by Obi, requires that borrowing must specify its purpose and include a cost-benefit analysis outlining economic and social benefits, highlighting the need for transparency in borrowing.

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Obi pointed out that many government loans do not meet these legal and economic requirements, stating that "most of the borrowings by this government do not satisfy the requirements of law or the requirements of economic common sense".

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He expressed concern over Nigeria's high debt servicing burden, which constrains the government's ability to invest in key sectors that drive development, noting that "what matters is not debt-GDP as much as debt-debt servicing ratio".

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Obi warned that borrowing for non-productive purposes creates a "double jeopardy," where current revenues are used to service debts that do not enhance future economic capacity, highlighting the need for responsible borrowing practices.

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He called on the government to adopt a more transparent and accountable approach to borrowing, insisting that loans must be justified and made to work for the benefit of citizens, emphasizing that "a responsible government does not merely defend borrowing; it explains it, justifies it, and most importantly, ensures it works for the people".