Economist Tope Fasua has published a comprehensive defense of national borrowing, directly challenging former Nigerian President Olusegun Obasanjo’s assertion that debt is detrimental to the country. In a piece published by Premium Times, Fasua argues that Obasanjo’s stance is politically motivated rather than economically sound, suggesting the former leader is attempting to influence the political landscape by opposing the current administration of President Bola Tinubu.
Fasua posits that debt is a fundamental instrument for purposeful governance and long-term development. He states, "On the contrary though, I posit that debt can build generations." According to the economist, nations that have achieved significant economic milestones have done so by leveraging their cash flows to secure assets such as roads, rail lines, and airports. He contends that the Western world has historically utilized these financial tools effectively, while African nations, including Nigeria, have often been underinvested in by global partners.
The article traces the history of national debt, noting that borrowing for public works and infrastructure has been a standard practice since ancient times. Fasua highlights that even the United States, under President Andrew Jackson, experienced severe economic instability after attempting to eliminate national debt entirely. He argues that maintaining a debt-free status can lead to recessions and reduced economic growth, as governments lose the ability to invest in future projects. He notes that Nigeria’s debt-to-GDP ratio of 35 percent is among the lowest globally, suggesting that the country has ample room for strategic borrowing to address infrastructure deficits and population needs.
Fasua also references the 2005 Paris Club agreement, where Nigeria paid $12 billion to have $18 billion in debt written off. He suggests that while the deal was controversial, it was part of a broader global framework for managing sovereign debt. He warns that rejecting debt outright ignores the realities of modern treasury management, where leveraging resources is essential for providing healthcare, education, and other public services. He concludes that labeling debt as "worse than leprosy" is a careless fallacy that ignores the tangible benefits of infrastructure development funded by such loans.