Peter Obi, the Labour Party presidential candidate during 202 election, has opposed what he described as the Federal Government’s disturbing pattern of substantial borrowing and extravagant spending on non-essential procurements, cautioning that such a pattern would soon wreak havoc on the economy.
The former Anambra State governor also criticized the Federal Government's securitization of Ways and Means borrowing from the CBN, which he said is against the law and the Central Bank of Nigeria, CBN, act stipulating that the FG's borrowing from the CBN should not exceed 5 per cent of the previous year's revenue.
In a statement titled ‘Debt and Waste as Economic Policy’ released yesterday, Obi asserted that the current trend of the Federal Government's lavish spending, supported only by equally lavish borrowing, is unsustainable and will eventually devastate the economy.
He said, “What is emerging is a disturbing pattern of huge borrowing and profligate spending on nonessential procurements which are being termed ‘capital’ expenditure and are being funded with an accumulation of debts. For instance, a good number of these so-called ‘capital’ expenditure items as contained in the 2024 budget are more procurement and luxury projects.
“This trend of lavish spending backed only by equally lavish borrowing is unsustainable and would wreck the economy in due course. It needs to be halted.
“Unless this trend is halted, the nation runs the greater risk of running into more turbulent economic waters in the near future. This is to add my concerned voice to those of many other troubled Nigerians.
“This is the time when we need to go beyond politics and partisan grandstanding to address the fundamental issues of rational economic management. I am afraid that the current administration is not paying sufficient attention to issues of rational economic management. Instead, an unsustainable level of debt is being piled upon the economy thereby further burdening our already distressed populace who are bearing the burden of harsh economic policies not backed by compassionate cushioning policies.”
Tracing the problem from the previous administration, Obi said: “Barely 26 days to the end of its eight-year tenure, the Buhari administration got the Senate to approve a N22.7 trillion Ways and Means borrowing from the CBN. In seven years, CBN lending to the Buhari government had climbed 2700 per cent in flagrant violation of the CBN Act.
