‘Debt destroys generations’: Obasanjo to Tinubu’s loan policy

Former President Olusegun Obasanjo has criticised President Bola Tinubu’s continued reliance on domestic and foreign loans, warning that excessive borrowing could mortgage the future of generations of Nigerians.

Obasanjo described debt as more destructive than leprosy, arguing that while the disease affects individuals, an excessive debt burden could have consequences for entire generations.

He made the remarks on Friday at the Ajibosin Platform, a public forum held in Abeokuta, Ogun State, with the theme, “Leveraging Artificial Intelligence to Solve Grassroots Problems and Accelerate National Development.”

Reacting to Tinubu’s recent defence of government borrowing, the former president rejected the president’s comparison of debt with leprosy.

“And for anybody to say debt is no leprosy, is absolute nonsense. Debt is worse than leprosy. Because leprosy destroys only one person. Debt destroys generations,” Obasanjo said.

His comments followed President Tinubu’s defence of the administration’s borrowing strategy, in which the president argued that loans should be assessed based on the projects they finance and the value they create.

“The real question is not how much we borrow, but what we build, what value we create and what future we leave behind,” Tinubu had said on Thursday.

The president had also maintained in April that borrowing was not inherently wrong if the government worked hard to repay its obligations.

The former president also questioned Nigeria’s economic performance over the past four decades, particularly the sharp depreciation of the naira against the United States dollar.

Recalling when he started his farm 47 years ago, Obasanjo said the naira exchanged at about ₦1 to $1.85 at the time.

He questioned how the country had reached a situation where the exchange rate stood at approximately ₦1,500 to the dollar.

Obasanjo further criticised Nigeria’s reliance on international financial institutions, particularly the International Monetary Fund and the World Bank, arguing that the institutions were not established to determine the country’s economic direction.

“World Bank and IMF were not designed for us. They were not built by us. They were built before we became independent. And that’s the people who would determine what we do,” he said.

He also cautioned against adopting economic prescriptions from foreign-trained experts without adequately considering Nigeria’s peculiar circumstances.

On Tuesday, the president asked the National Assembly to approve the processing of external loans worth $20.52 billion and €1.05 billion under the 2026–2027 Supplementary External Borrowing Plan.

The request followed previous borrowing approvals, including a $516.3 million facility from Deutsche Bank for the construction of the Sokoto–Badagry Superhighway.

The National Assembly had also approved a $6 billion external borrowing plan in March to support the federal government’s budget and finance the rehabilitation of major seaports.

Federal Government has defended its borrowing strategy as necessary to finance infrastructure and meet development obligations, though concerns have persisted over Nigeria’s revenue capacity and the growing cost of servicing public debt.