Group cautions against debt payment

Etim Imisim
This Day
June 4, 2006

A group, African Network for Environment and Economic Justice (ANE-EJ), has called on the National Assembly to reject a proposal sent by President Olusegun Obasanjo to settle London Club debt at the expense of key development challenges in Nigeria.

The group said it condemned a letter dated May 24, 2006 which President Obasanjo sent to Senate President, Ken Nnamani, asking that the recent $12.12 billion as debt to the Paris Club of creditors should be followed up with $2.15 billion to the London Club. ANEEJ said the President should shelve any payment to London Club because Nigeria, which has over 70 per cent of its population living in absolute poverty, is still bleeding from the payment of $12.12 billion to Paris Club creditors. The group demanded
that the amount paid Paris Club should be returned to Nigeria to enable government fight poverty and diseases and finance other aspects of development in Nigeria. In a release signed by ANEEJ president, Rev.

David Ugolor, and deputy executive director, Mr. Leo Atakpu, the group cited the president’s letter saying “with the successful conclusion of the Paris Club debt deal, I wish to intimate you that we have now turned our attention to the London Club category of debts-made up of Promissory Notes, Par Bonds, and Associated Oil Warrants. The total
amount outstanding is currently about $2.15 billion”. President Obasanjo further remarked that the London Club category of debts are traded in international market and possess different characteristic from Paris Club debts, the release stated. Therefore, a different approach should be adopted for their treatment. For this reason, the
group said that the government has invited proposals from reputable financial advisory services firms to help decide the strategic approach the government should adopt to settle the debt. “We are deeply concerned about government’s (plan), what of the local debts put currently at N1.5 trillion ($11.9 billion)”, Ugolor and Atakpu said.
The group added that President Obasanjo should not deplete the country’s external reserve with external debt payment. It said also that President Obasanjo should leave enough funds for incoming administration to stabilise democracy and promote good governance in Nigeria. But if Obasanjo wanted to pay debts owed by government,
priority should be given to local debts which will boost the country’s economy. “We are campaigning for the return of the $12.12 billion to fight poverty and diseases as well as finance development in Nigeria,” Ugolor and Atakpu said. “We know $2.15 billion will mitigate the infant mortality rate in Nigeria. It can help send millions of children to primary school. It can go a long way in combating HIV/AIDS that has
climbed to worrisome heights in Nigeria”, the group added. The two leaders said ANEEJ will take the matter to Southern Debt Campaigners meeting slated for Nairobi, Kenya, June 18-21, 2006 and other international fora to bring pressure to bear on President Obasanjo to stop paying odious debts at the expense of the attainment of the
Millennium Development Goals in the country. “We feel that a government that is driven by a sense of equity, social justice and welfare of its people can not just pay $12.12 billion within six months, is considering paying another $2.15 billion external debt whereas there is a whooping $11.9 billion local debt”, it stated.

Categories: Africa, Nigeria, Odious Debts

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