Accumulating debts for the next generation has been described as a criminal act by former president Olusegun Obasanjo.
Mr Obasanjo stated this in an interview with Channels Television on Sunday, saying the borrowing spree of the federal government led by President Muhammadu Buhari amounts to foolishness.
Mr Buhari had last week requested the approval of the national assembly to externally obtain fresh loans of $4.054 billion and €710 million, saying it is meant for some capital projects across the country owning to emerging needs.
Speaking on the development, Mr Obasanjo explained that it was not wrong to borrow but what is wrong is what one is borrowing for and the plan or capacity to repay.
“If you want to build a commercial house and you go and borrow money, and you have 50 percent of your own money, and you borrow 50 percent and in five years, you pay the 50 percent that you borrowed. That is a wise thing to do,” he explained. “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 folly. If we are borrowing for development that can pay for itself, that is understandable. Then the payment, how long will it take to pay itself?” the ex-president queried.