Former President Olusegun Obasanjo has attacked the administration of President Muhammadu Buhari over the level of loans the administration has taken; saying borrowing for recurrent expenditure is foolish.
VAM News had reported that President Buhari, last Tuesday, September 14, forwarded a letter to the National Assembly seeking its approval to borrow fresh $4,054,476,863 and €710 million loans, despite public outcry over incessant borrowing by the current administration.
Buhari in the letter urged the national assembly to approve grant components of $125 million.
According to the president, the proposed loan would be financed through sovereign loans from the World Bank, French Development Agency, EXIM Bank and IFAD.
Buhari noted that the loan if approved would enable the Federal Government to fund critical infrastructural projects in different sectors across the country.
Reacting, former President Obasanjo condemned President Buhari, saying borrowing for recurrent expenditure is foolish.
The elder statesman in an interview with Channels TV on Facebook on Sunday said borrowing and accumulating debt for the next generations to come is criminal.
He said, “If you want to build a commercial house and you go and borrow money, and you have 50 per cent of your own money and you borrow 50 per cent and in five years, you pay the 50 per cent that you borrowed. That is a wise thing to do. But if you have to go and borrow money for you to be able to feed yourself and your family, that is a stupid thing to do.
“So, if we are borrowing for recurrent expenditure, it is the height of foolery.
“If we are borrowing for development that can pay itself, that is understandable; then how long will it pay itself? But we are borrowing and accumulating debt for the next generation and the next generation after them, it is criminal, to put it mildly. What are we borrowing for?
“When I came into government and was elected President, we were spending $3.5bn to service debt, and even with that, our quantum of debt was not going down.”