Former President Olusegun Obasanjo has said some “clowns” are rubbing hot ointment, popularly known as Aboniki, into the injury of Nigerians with some of the policies they are bringing up.
Obasanjo said this in a paper he presented, titled: “Nigeria: The Challenges of Debt and Sustenance of Democracy,” on Friday at an event sponsored by Unity Bank.
He said Nigeria has developed a taste for debt, which mounts rapidly because of interest.
He said: “There is a dangerous emerging trend today in Africa and it is eerily familiar with developments on the continent in the 70s.
“Our political leaders have suddenly developed not just a taste for, but a voracious appetite for debt.
“As usual, most of such debts procured are hardly thought through.
“Predictably, the ability to repay such debts is lacking.
“Unfortunately for us and unlike in the past, the new creditors are less tolerant of our limitations and inadequacies and are now demanding to manage institutions and agencies with a view to recouping their loans.”
Obasanjo said further at the event, tagged: “The Nigerian Story, Why I am Alive Campaign,” sponsored by Unity Bank in Lagos: “Using debt to finance growth and/or development is a double-edged sword that must be wielded with a high degree of discipline, responsibility, and foresight.
“Everyone knows that our governments are notoriously deficient in serious and adequate discipline and most often lack competence and consistency as well.”
He cited the case of Lagos, which borrowed to build a light rail, but which the succeeding government abandoned for its full four years even at “65% completion when it should have started paying down the loan.”
Obasanjo, however, said such a problem is not limited to states.
He said: “The Federal Government built a nice looking extension to the Murtala Mohammed International Airport that looks completed from outside but not in service.
“To rub aboniki on the injury, some clowns are talking of demolishing the main airport and rebuilding from scratch.
“Where on earth is a poor country wasting resources that way?”
Obasanjo also said defaulting on debt repayment is very easy and convenient, which also favours the creditor.
He said: “Deliquescent behaviour allows the opportunity to impose stipulated sanctions and later appear friendly by offering to restructure your debt.
“At the end of the day, what is done is simply to add to your interest payments and other fees to the principal sum at a high premium.
“So, overnight, a debt of USD$1 million will become $5 million in spite of the fact that you had repaid $1.2 million.
“I say this without fear of contradiction. I have borrowed from banks as a private sector operator and I have borrowed as a political leader, so I believe you would understand my fears and experience about jumbo loans and my agony in getting rid of our external debts and developing a sustainable approach to address our domestic debts.” – The Eagle Online.
