Labour Party’s (LP) Presidential candidate, Peter Obi has advised the Federal Government to restrict borrowings to the statutory 5 percent of last year’s revenue.
The presidential candidate also urged FG to stop borrowing for consumption.
He gave this advice on Thursday via his official Twitter account.
“As a matter of urgency, Nigeria must stop borrowing for consumption, but only borrow to invest in regenerative development projects and other productive ventures” Obi tweeted.
“It is ironical that States that received fiscal bailouts did not invest them properly; did not repay the loans and are still borrowing beyond their revenue earning”.
“Also, it has become imperative to restrict Federal borrowings to the statutory 5% of the previous year’s revenue”.
FG had exceeded 3 percent fiscal borrowing threshold in 2020 because of the COVID-19 pandemic.
The fiscal responsibility law provides a limit of 3 percent debt threshold for sustainability — but the president can “exceed the ceiling if there is a clear and present threat to national security or sovereignty of Nigeria”.