TheCable

Peter Obi, the presidential candidate of the Labour Party (LP), says loans taken by Nigeria should be for the purpose of investment.

Speaking on Friday in an interview with NigeriaInfo FM, Obi said Nigeria’s borrowing pattern needs to change, adding that there is nothing wrong with taking loans.

He said countries like Japan and Singapore properly utilise their loans for domestic investments.

“The reason why we got to the stage where we are using 98 percent to service debt is that the debt you borrowed was not productive. We didn’t put it into productive assets. So, it was consumed. So, when you borrow money and consume it, your service debt increases,” he said.

“I have given these examples everywhere. We are not the only country that is borrowing; there is nothing wrong with borrowing. I say it in the morning, afternoon, and night.

“Let me use Japan, Japan is owing 230 percent of their GDP, but per capita in Japan is still about $48,000 because the money they borrowed was meant to help build a better economy. It was well invested; it was to save the country from collapsing.

“Most of the money was domestic investment, and Japan is still the highest holder of US treasuries. Singapore, aside every day, people don’t even know Singapore more than 100% of its GDP in debt. Singapore’s debt is not affected; per capita of Singapore because they have a law that says for every money you borrow, it must be for investment in the future.

“But here, we borrow it, and we consume it. So, when the owner of the money comes, because we have no money to pay, it is affecting our earnings. So, what we need to do as a country is to first change the borrowing pattern and make sure that our borrowing is for investment.”

While commenting on the need for accountability, he said the masses need to show courage and hold government officials accountable.