Peter Obi uses his Chatham House speech to condemn the current practise of borrowing for consumption

FORMER Anambra State governor and Labour Party presidential candidate Peter Obi has lashed out at the financial record of the current government saying that it has mismanaged the economy by borrowing huge sums just to pay concurrent costs like paying salaries.

Speaking earlier today at Chatham House on London, Governor Obi said all monies borrowed since 2015 for the improvement of the national economy were wasted. While analysing the country’s rising debt, Governor Obi said Nigeria had successfully grown the N15trn ($33.1bn) debt as of 2015 to N75trn ($165.5bn) presently, borrowing for consumption.

Stating that the entire money was thrown away, Governor Obi stated that while borrowing is essential for any economy to thrive, on the case of Nigeria it is not being done judiciously. He stated that monies borrowed must be put into the development of the economy and invested into production.

Governor Obi said: “There’s nothing wrong in borrowing as it is legitimate and every government I’ve studied in the world borrows, even Britain as we speak owes 70% of their gross domestic product (GDP). Every government I know, lives on borrowing.

“Norway, with $1.4trn sovereign wealth, is owing and the economies of the world, even the biggest economy in the world, America, is owing almost 100% of their GDP. The second largest economy, China, is owing almost 70%, while Japan is owing over 230% of their GDP but let me tell you the difference.

“Japan is owing 230% of their GDP but they invested the money to save their economy and even with that, Japan is still the largest holder of the US treasuries, so there’s something they can fall back on. So borrowing is not wrong.

“But what has happened is that when you borrow for consumption, you have a crisis. Nigeria in 2015 had a per capita income of $2,500, we were owing about N15tn. Today, with central bank’s ways and means, we are owing about N75tn, so we have grown that debt profile by over 400%, which means that the money we borrowed was thrown away.”

He further stated that if elected, he would fight corruption to ensure that Nigeria becomes a country where its citizens are proud to hold its passport and foreign investment thrives. Back in November 2022, Governor Obi stated that borrowing must be channelled strictly into production, while explaining his consumption to production theory.