AllAfrica
July 23, 2003

FOR the past 18 years, Nigerians have been in bondage. Within this period, international financial institutions have held the nation in a suffocating grip, practically squeezing life out of the people. Like a terminally ill anaemic patient, the nation has since received the economic equivalent of several blood transfusions but has continuously remained in coma.

Analysts say that Nigeria’s present plight is the result of a long period of neglect of social infrastructure by successive administrations at the federal and state levels. It has also been pointed out that this official abandonment of governmental responsibilities has been exacerbated by debt obligation which has been hanging on the nation’s neck like a mill stone threatening to drown the country. Dr Abubakar Momoh who teaches political economy at the Lagos State University (LASU), told our reporter last Thursday in Lagos that the prevailing situation in the country has resulted because past and present Nigerian government have spent billions of naira to service Nigeria’s external debts annually. He stated that this situation is among the major factors responsible for Nigeria’s impoverishment.

Said he: “If the Federal Government should use only N100 billion for job creation and housing this year alone, it would go very far in alleviating the sufferings of Nigerians who are unemployed and homeless. Really, the debt burden is a very big albatross on our necks. It is not giving us any respite at all. And it is compulsory that we pay every year because it is always set aside before the government begins to disburse money for other purposes.”

Momoh’s statement was a re-affirmation of the Federal Government’s position months after Obasanjo was sworn-in 1999.

As a result of this direct deduction, Momoh has pointed out that the enormous funds which are committed to compulsorily service foreign debts has resulted in government’s inability to maintain the nation’s infrastructural facilities and discharge other responsibilities which should promote the welfare of the people.

Said he: “What is happening now is that the government which is supposed to provide basic social amenities, rehabilitate roads, resuscitate the educational sector, create jobs, give internal credit and lower interest rates is not being done”

Investigation by our reporter revealed that Nigeria’s foreign debt began accumulating shortly after the nation was granted political independence in 1960. In fact, it has been argued that some of the early debts owed by Nigeria were inherited from the colonial regime. Such debts arose from loans that were negotiated by the colonial administration. But the Tafawa Balewa government which took over the mantle of government in 1960 had declared that although it knew nothing about these inherited debts, it would be bound by the international obligations entered into on its behalf by the government of the United Kingdom. Apart from this, the colonial government also extended grants and aid to Nigeria.

This notwithstanding, investigations have shown that the bulk of Nigeria’s debt was accumulated from 1978, during Obasanjo’s tenure as a military Head of State, through Shehu Shagari’s administration (between 1979 and 1983) and the Babangida military dictatorship (1985-1993). The first two huge loans totalling $1.75 billion was incurred by Obasanjo in 1978. On the whole, the regime received 22 foreign loans. But the Shagari administration surpassed this by far by taking a total of 59 loans, while the Gen. Muhammadu Buhari administration (1983-1983) took eight.

But the nation’s debt profile rose astronomically during the Babangida regime. There is abundant evidence that these debts mounted rapidly due to the effects of rescheduling during the Babangida years.

Tracing the history of Nigeria’s debts, he had admitted that the nation had actually borrowed a total of $13 billion in 20 years, adding that about $17 billion had been repaid. But even with such huge repayment, Nigeria was still said to be owing $22 billion to the Paris club which represents American and European government lenders. Obasanjo had also disputed the $32.3 billion bill which the International Monetary Fund (IMF) had claimed Nigeria was owing. The President and the Debt Management Office had categorically declared that Nigeria’s debt was $28 billion.

Said Obasanjo to IMF at the conference: “We may not agree with your figure, because we paid something, and we deducted what we had paid from what we owe.”

Earlier on, Obasanjo and Chief Philip Asiodu, his former Economic Adviser, had at various fora, declared that the nation’s actual profile was bloated.

The government’s stand last year notwithstanding, many Nigerians are not impressed with the manner the Obasanjo administration has handled the debt burden. Some observers of Nigeria’s debt stock have argued that what the government has done so far remains inadequate to tackle the debt crisis.

According to Mr. Didi Adido, the General Secretary of Iron and Steel Senior Staff Association of Nigeria (ISSSAN), Nigeria’s foreign debts are dubious and unpayable. He advised the Obasanjo regime to entirely stop further repayments or servicing of such debts.

Said he: “What we have paid is much more than what we borrowed. If we stop paying today, nobody can say we have not paid our debt.”

But Dr. Ndubisis Nwokoma who teaches economics at the University of Lagos (UNILAG) said the debts could be repaid if the government had the political will to recover past government treasury looters in the country.

Said he: “If we can recover all the money that was looted by past government officials, it would substantially reduce the foreign debt Nigeria is owing.”