Former President Olusegun Obasanjo warns that Nigeria’s growing debt burden is worse than leprosy, urging caution over borrowing and IMF and World Bank influence.
Former Nigerian President Olusegun Obasanjo has said that Nigeria’s mounting debt burden poses a greater danger to the country than leprosy. He made the remarks on Friday at the third Ajibosin Annual Symposium, held at the amphitheatre of the Olusegun Obasanjo Presidential Library in Abeokuta, Ogun State.
Obasanjo argued that excessive borrowing does not only affect the government in power but also places a financial burden on future generations who played no part in accumulating the loans.
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Obasanjo Warns on Nigeria Debt Burden
The former president said the consequences of rising national debt could extend to generations of Nigerians. He contrasted this with leprosy, which he noted affects only an individual.
Obasanjo, who governed Nigeria between 1999 and 2007, recalled the debt relief his administration secured through negotiations with the Paris Club. He suggested the country should be more cautious about returning to a situation where a significant portion of its re
He questioned the justification for continued borrowing despite the country’s economic challenges. According to him, the problem is not simply the decision to obtain loans but the long-term consequences of accumulating debt without sufficient consideration for the country’s ability to repay it.
His comments come as President Bola Tinubu recently sought legislative approval for a supplementary external borrowing plan involving 20.52 billion dollars and 1.045 billion euros. The proposed financing covers power, transportation, healthcare, education, agriculture, water supply, security and job creation, with the government maintaining that the funds would support infrastructure and economic activity.
Criticism of World Bank and IMF Influence
Obasanjo criticised the influence of international financial institutions, particularly the World Bank and the International Monetary Fund, on Nigeria’s economic policies. He argued that policies promoted by the institutions were not necessarily designed around the needs and development priorities of African countries.
He supported his criticism with an account of agricultural subsidies in Britain. Obasanjo recalled a meeting with former British Prime Minister James Callaghan, during which he learnt that farmers received government support for every sheep they owned.
He questioned why Nigeria was discouraged from supporting its agricultural sector when developed countries continued to provide assistance to their farmers. He maintained that Nigeria should not allow international financial institutions to dictate policies without considering its peculiar economic circumstances.
Obasanjo argued that although officials working with the World Bank and IMF might possess strong academic qualifications, their recommendations should not automatically become the country’s economic direction. He said the institutions were not designed for Nigeria and questioned why the country should depend on policy prescriptions from people who might not fully understand its social and economic realities.
Naira Depreciation and Agricultural Experience
Obasanjo also expressed concern over the declining value of the naira, using his personal experience in agriculture to illustrate the currency’s depreciation. He recalled that when he established his farm about 47 years ago, the exchange rate stood at approximately 1 naira to 1.85 dollars.
He questioned what Nigeria had done in 47 years to reach a rate of about 1,500 naira to the dollar. He criticised leaders over the decline and rejected the argument that debt is not leprosy, saying debt is worse because leprosy destroys only one person while debt destroys generations.
Olusegun ObasanjoNigeria DebtWorld BankInternational Monetary FundNaira DepreciationAbeokutaParis Club
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