Nigeria after debt relief

Remi Ogunmefun
The Tide Online
May 24, 2006

The battle for the cancellation of Nigeria’s foreign debt has been won
and lost.

The country has however benefited immensely from the new
lease of life that this debt settlement has brought. The Nigeria
foreign debt issue is one of the landmark achievements of this
government and probably saved millions of lives that could further have
been driven into poverty. The battle has however been lost in some
regard because we could not get total cancellation of the debt. Many of
us did not see the listing of the Nigeria Foreign Debt neither do we
know the profile, who incurred them and for what purpose. But what we
do know is that many of these debts were incurred by the Nigerian
military regimes. The Nigeria’s House of Representatives in particular
in its resolution to halt the payments of Nigeria’s external debt
stated, “Nigeria’s economy had been devastated by a series of military
regimes from 1984 to 1999, who stole billions of dollars from state
coffers.” Issues were raised at the time of the battle on the
proprietary of accepting these debts based on the legal principles of
odious debt. I recall that apart from international arguments on this,
I also argued in an article published by This Day on June 14, 2005
titled, Legalities in Repudiating Nigeria’s Foreign Debt,
that we should repudiate our foreign debt on the ground that most of
these debts were odious since they were created for the interest of the
state. If such debts were not created for the needs or interest of the
state but to strengthen the despotic regimes, the debt is odious for
the citizens of Nigeria. This debt is therefore not an obligation on
the country but a personal debt of the regime that incurred it.
Furthermore where a debt was created and used for ends which to the
knowledge of the creditor are contrary to the interest of the people
such a creditor has committed a hostile act against the people of
Nigeria. He can therefore not expect that a nation free from such
despotic power will assume responsibilities for that debt. Presumably,
these arguments were not considered even though raised at any
international fora and examples were shown of such successful
repudiation in the world. Apparently those in government considered it
better to resolve the debt issue on moral and business grounds, but at
what cost? Now that the matter has been settled, what lessons have we
learnt from these foreign debts crisis to guide us for the future? What
should we do to prevent this kind of situation from repeating itself in
Nigeria. In America, Canada and virtually all western countries they
have what can be considered a sizeable foreign debt. In fact, the
United States is regarded as the largest foreign debtor yet no person
in that country complains. The reason being that in the United States
and most western countries foreign debts are incurred with everyone’s
knowledge. There are structures and legislations regulating this
process. What we have in third world counties such as ours until the
advent of this government is a complete departure form the western
standards. Foreign debts are incurred without the clear mandate of the
people and nobody knows about them. In some situations, most of the
debts ended up in dubious projects. To avoid this unfortunate situation
we should immediately review and publish the process for incurring
foreign debts in Nigeria henceforth. We may consider the following
input. Nigeria should push for the creation of an International
Financial Institution that is structured as a clearing and review house
for all loan applications from third world countries in particular.
Such an institution will be under the supervision of the United Nations
and charged with the responsibility of determining loans that are
odious to the applying nation. In the past, western banks lend money to
third world countries without international guidance. It is even
alleged that most of these loans end up in the pr

Categories: Nigeria, Odious Debts

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