Obi Slams Led Govt Over Rising Debt Crisis

Former presidential candidate Peter Obi has accused the Tinubu-led government of steering Nigeria toward a financial disaster, citing a sharp rise in public debt. The criticism came as the country’s debt-to-GDP ratio surpassed 35% in 2024, according to the National Bureau of Statistics. Obi, a former governor of Anambra State, delivered the remarks during a live broadcast on Channels Television, where he warned that the government’s fiscal policies risked destabilising the economy.

Obi’s Sharp Critique of Fiscal Policy

Obi’s comments were a direct rebuke of the federal government’s handling of public finances. “We are heading to disaster,” he said, pointing to the lack of transparency in budget allocations. He specifically called out the Ministry of Finance for failing to implement austerity measures despite the country’s deteriorating economic outlook. Obi’s remarks came after the government announced a 12% increase in public debt in the first quarter of 2024, with the total standing at N26.5 trillion.

The former vice-presidential candidate argued that the current administration’s reliance on borrowing to fund infrastructure projects was unsustainable. “We cannot build roads and bridges on the back of debt,” he said, adding that the government must prioritise fiscal discipline. His comments resonated with opposition figures and civil society groups who have long raised concerns about the country’s debt trajectory.

Debt Crisis Reflects Wider Economic Struggles

The rising debt levels are a symptom of broader economic challenges facing Nigeria. The country’s currency, the naira, has lost over 40% of its value against the US dollar in the past year, while inflation remains above 25%. These factors have eroded public purchasing power and increased the cost of imports, including essential goods like fuel and medicine. The National Bureau of Statistics reported that the debt-to-GDP ratio rose from 30% in 2023 to 35% in 2024, a sharp increase that has alarmed economists.

Analysts at the Centre for Economic and Policy Research (CEPR) warned that the government’s borrowing strategy could lead to a debt trap. “If the current trend continues, Nigeria could face a liquidity crisis within two years,” said Dr. Chika Nwankwo, a senior economist at CEPR. He added that the government must focus on revenue generation and public spending reforms to prevent a deeper financial crisis.

Political Tensions Escalate

Obi’s criticism has intensified political tensions within the ruling All Progressives Congress (APC) and opposition parties. The government has dismissed his claims as politically motivated, with a spokesperson for the Ministry of Finance stating that the debt increase was necessary to fund critical projects. “Nigeria’s development requires strategic investment, and we are committed to ensuring that every naira spent contributes to long-term growth,” the spokesperson said.

However, critics argue that the government is not doing enough to address the root causes of the debt crisis. They point to a lack of investment in agriculture, which remains a key pillar of the economy, and a continued reliance on oil revenues. “The government is not diversifying the economy, and that is a recipe for disaster,” said Adebayo Adeyemi, a political analyst at the Lagos-based Policy and Development Research Centre.

Debt and Development: A Pan-African Perspective

The situation in Nigeria highlights broader challenges facing African countries in achieving sustainable development. Many nations on the continent are grappling with high debt levels, weak governance, and limited access to capital. The African Development Bank (AfDB) has warned that rising public debt could undermine progress toward the Sustainable Development Goals (SDGs), particularly in areas like education, health, and infrastructure.

“Nigeria’s experience is a cautionary tale for other African countries,” said Dr. Nkechi Okafor, a development economist at the AfDB. “Without strong fiscal management and transparent governance, economic growth will remain elusive.” She added that regional cooperation and better debt management frameworks could help African nations avoid similar crises.

What’s Next for Nigeria’s Economy?

As the 2024 budget review approaches, the government faces mounting pressure to address the debt crisis. The National Assembly has already called for a public hearing on the country’s fiscal policies, with several lawmakers demanding greater transparency. Meanwhile, civil society groups are pushing for a debt audit to assess the government’s borrowing practices.

The coming months will be critical for Nigeria’s economic outlook. If the government fails to implement meaningful reforms, the debt crisis could spiral further, with serious consequences for the country’s development goals. For now, the debate over fiscal responsibility remains at the heart of national politics, with citizens and experts watching closely to see if the government will take decisive action.