Former President Olusegun Obasanjo said Nigeria faces an impending bankruptcy, with the country’s external debt ballooning by 700 per cent in four years. But simple fact checking showed the former leader got his figures wrong on the level of external debt.
He sounded the bankruptcy alarm as a keynote speaker at the ‘Why I am Alive’ campaign celebration in Lagos. The event tagged “The Nigerian Story” was created by the chief executive of Eureka Productions, Caroline Moore.
According to a report by The Guardian, Obasanjo put Nigeria’s external debt at N24.947 trillion ($81.2 billion), from $10.32 billion in just four years (2015).
In his interpretation, Nigeria would need to commit half its foreign foreign earnings to servicing its current level of indebtedness.
“Such a situation talks about impending bankruptcy,” the former president warned. He insisted that “no entity can survive while devoting 50 percent of its revenue to debt servicing.”
He explained that the current budget out of which Nigeria spends 25 percent to service debt “is not the country’s total earning; a lot of it is also borrowing. Simply put, we are borrowing to service what we have borrowed and yet we are borrowing more.
“I do not need the brain of any genius to conclude that those who use statistics to dig us deeper into debt are our enemies: statistics can be used to serve any purpose, and that is why Winston Churchill talked of lies, damn lies and statistics, meaning statistics can be made master of lies.”
As The Guardian reported, Obasanjo called for national dialogue or debate on Nigeria’s short, medium and long-term plans as a nation.
He said his biggest worry was that, with the scale of debts the country was walking into, “there are already fiscal challenges to meet(ing) our obligations.”
Fact checking however showed that Obasanjo may have been misquoted on the level of external debt and he also was quoting outdated debt figures. .
According to the Debt Management Office, Nigeria’s external debt as at June 2019 was $27.1 billion, with the 36 states and Abuja owing $4.2 billion. Domestic debt level as at June was $56.7 billion, with the states owing $12.9billion . In Naira terms, external debt stood as N8.3 trillion in June and domestic debt was N17.3 trillion.
Thus, the former President got it wrong putting the entire external debt at $81.2 billion.