Former President Olusegun Obasanjo has expressed concerns that Nigeria and other African countries might encounter challenges in securing debt relief due to their substantial debt profiles. Obasanjo also alleged that the debt relief obtained by Nigeria from the Paris Club during his tenure was mismanaged by successive administrations, leading to the country accumulating significant and undeserved debt.
As of September 2023, Nigeria’s public debt stood at N87.91 trillion, according to the Debt Management Office. Obasanjo highlighted that the mismanagement of previous debt write-offs had created a situation where future generations might find it nearly impossible to obtain similar debt relief.
In 2003, during Obasanjo’s presidency, Nigeria secured debt relief from the Paris Club, resulting in a final agreement in October 2005 for debt relief worth $18 billion and an overall reduction of Nigeria’s debt stock by $30 billion.
Despite the debt relief in the past, the former president pointed out that the current debt situation was exacerbated by mismanagement. He cautioned that leadership issues were a significant problem facing the continent, and the coming generations might be burdened with paying off the increasing debt.
While acknowledging the efforts of Pastor Chris Oyakhilome’s Future Africa Leaders Foundation in building leaders, Obasanjo stressed the importance of setting good examples, being bold and courageous in decision-making, accepting mistakes, and learning from them.
In a separate event, Obasanjo expressed hope that Nigeria’s socio-economic situation could improve in about four years through prayers and thanksgiving. He encouraged gratitude even in challenging situations, suggesting that circumstances might change for the better in the future.
Economists and experts, reacting to Obasanjo’s comments, blamed poor fiscal management for the re-accumulation of significant debt after the debt relief efforts during Obasanjo’s presidency. They emphasized the need for fiscal discipline, responsible expenditure, and efforts to increase revenue to achieve sustainable debt management. The Minister of Finance and the Coordinating Minister of the Economy, Wale Edun, recently highlighted the government’s commitment to shifting focus towards revenue and away from excessive borrowing.
The Debt Management Office reported that Nigeria’s total public debt reached N87.91 trillion by the end of the third quarter of 2023. While the debt stock is within sustainable limits, the government is urged to focus on revenue generation and prudent fiscal management.