GENERAL OLUSEGUN AREMU OBASANJO “APRIL FOOLED” NIGERIANS IN JUNE – NO DEBT RELIEF FROM THE PARIS CLUB
BY OGBENI LANRE BANJO,
NCP GUBERNATORIAL CANDIDATE, 2003
On Thursday, June 30, 2005, General Olusegun Obasanjo, with the collusion of his Minister of Finance, Mrs. Ngozi Okonjo-Iweala misrepresented facts to Nigerians that the Paris Club has forgiven some of the so-called “debt” of Nigeria by $18b. Governors, especially the neophyte in Ogun State, jobless political jobbers, untraditional rulers and several political parasites poured encomiums on General Obasanjo, with some visiting Aso Rock, for the prevarications described as “monumental achievement.”
Initially, the idea of ignoring the shameless lies of their Baba in Aso Rock, Mrs. Okonjo-Iweala, and those rejoicing over this vanity crossed my mind. However, after a deep thought of what could happen if one leaves a dead relative of a mad man with him, I summoned courage to speak up. I truly feel that, like those in PDP, the mad man may start roasting his dead relative for dinner, or begin to pound him in a mortar with pestle like pounded yam. How would the sane onlookers feel? If it were only PDP members turning Abeokuta or elsewhere to a battlefield, I could run for my dear life. However, since this type of shameless deeds would affect my dear and non-dear fellow countrymen and women in the same boat that we are in, I feel it is my civic duty to expose liars without regard to their worldly powers.
On Wednesday, June 29, 2005, the Paris Club issued the following press statement:
”The representatives of the Paris Club creditor countries met in Paris on 29 June 2005 and expressed their readiness, consistent with their national laws and regulations, to enter into negotiations with the Nigerian authorities in the months to come on a comprehensive debt treatment. They took note of the economic reform program implemented by the Nigerian authorities since 2003 and of their willingness to take advantage of exceptional revenues in order to finance an exit treatment from the Paris Club. This announcement takes place after Nigeria has recently been declared eligible to IDA-only borrowing status and at a time when Nigeria has decided to renew closer relations with the International Financial Institutions. Creditors welcomed Nigeria's willingness to conclude a policy support instrument (PSI) as soon as this new instrument is approved by the board of the IMF, to pay all its arrears towards Paris Club creditors and to treat them equitably. On this basis, this debt treatment would include debt reduction up to Naples terms on eligible debts and a buy back at a market related discount on the remaining eligible debts after reduction. This Agreement would be phased in relation with appropriate IMF review under the PSI. This exceptional treatment of Nigeria's debt would offer a fair, sustainable and definitive solution to Paris Club creditors and Nigeria. The significant debt relief would ensure long-term debt sustainability and would represent an important contribution by Nigeria's Paris Club creditors to its economic development. It would also help Nigeria in its fight against poverty. Paris Club creditors are ready to invite Nigeria to negotiate in Paris as soon as it has concluded a policy support instrument with the IMF.”
It is clear from the above that all that was expressed was “readiness, consistent with their national laws and regulations, to enter into negotiations with the Nigerian authorities in the months to come on a comprehensive debt treatment.” The negotiation is subject to successful conclusion of “a policy support instrument” which simply means that certain conditions would have to be met for the IMF to sanction any debt relief. Based on their antecedents, such condition would mortgage our budget for some time to come, allow the powerful countries controlling the body to have increased unfettered access to our oil, and put Nigerians in deeper jeopardy. In a nutshell, if Nigeria fails to meet the requirements of the IMF, expected to lead to the conclusion of the policy support instrument, no debt would be forgiven.
It is true that General Obasanjo was promised by British Prime Minister Tony Blair, and Chancellor Gordon Brown that a certain amount would be forgiven provided certain conditions are met. However, it is germane to mention that President George Bush, Jr. of the almighty United States has not blessed this arrangement for a reason I wholeheartedly support. Mr. Bush believes that the Nigerians under whose rulership the funds were given simply shared the funds with their foreign co-recidivists. It goes without saying then that making the IMF approval a condition t for granting the debt relief brings the whole arrangement under the substantial control of George Bush, Jr. Further, it has been made clear to General Obasanjo that one of the conditions for President Bush to support the approval from the IMF is that the Liberian warlord, Charles Taylor, must be sacrificed. Already a decision has been taken in hallowed water to forcefully pick him up should Nigeria fail to play ball. Preparatory to grabbing him, the US Navy Rangers are already stationed in the Niger Delta. Also, allegation of his involvement with Al’Queda has been fabricated and was recently broadcast on NBC special program, DATELINE, in the United States.
Investigations also reveal that all the country members of the Club have not signed for the debt relief, because, as it is mentioned in the Paris Club press release, unlike us, they have to consider the laws of their various countries. The consideration of their various laws, which is time consuming, is one of the reasons why their statement reads that they would “enter into negotiations with the Nigerian authorities in the months to come.”
With all the processes and conditions cited here and the ones that cannot be made public, it is indubitably clear that there is no debt relief yet for Nigeria, at least none that is etched in stone. Why Okonjo-Iweala and Obasanjo have elected to deceive our people and celebrate lies is beyond the understanding of sane people. However, partisan political consideration particularly the elaborate but sinister plans to secure either a third term in office or a two-year extension may not be ruled out.
It is pertinent here to recall that Nigeria's debt problem is connected to loans she received in the 1980s from the governments of fifteen countries (UK, France, Japan, Germany, etc.) that formed the Cartel called “the Paris Club.” According to an Economist of the Brooking Institutes in Washington, D.C, the problem is a reflection of a flaw in the Paris Club debt-restructuring process more than Nigeria's inability or unwillingness to pay. What we have here is a case of non-performing creditors, and where the creditors refused to perform because of the military rulers the loans were given to, a prudent borrower ought to hold their feet to fire.
To expose the flaw, some historical perspective is requisite. In 1985, Nigeria's external debt was $19 billion, of which $8 billion was owed to the Paris Club creditors, $2 billion to other creditor countries e.g., Bulgaria, $8 billion to commercial creditors, and $1 billion to multilateral agencies (mostly the World Bank and the African Development Bank). At the end of 2004, the Nigeria's external debt was $36 billion. Of this amount, $31 billion was owed to Paris Club creditors, almost nothing to other bilateral official creditors, $3 billion to multilateral agencies, and $2 billion to commercial creditors. The appropriate question to ask then is this; why did Nigeria’s Paris Club debt balloon by $23 billion over the past 20 years? In brief, the Paris Club creditors stopped advancing new loans to Nigeria because they disliked the country's military dictatorship some of whom signed for the loans. The bulk of the $23 billion increase represents interest arrears, interest charged on these arrears, and penalties that accumulated after 1992 when the Paris Club creditors refused to negotiate a debt workout for political reasons, compounded by adverse exchange rate changes. It is instructive to mention that less than $400 million of the debt represents post-1985 borrowing.
Interestingly Nigeria has received virtually no new loans from the Paris Club creditors after 1992. On the other hand, she has paid almost $8 billion to these creditors since then. Yet, she still owes them $14 billion more than she did in 1992. Moreover, instead of applying Nigeria's payments to post-1985 loans to make these performing loans, the creditors have applied the payments against arrears and penalties. Thus, the post-1985 loans continue to accrue their own interest and penalties without challenge from all the Ministers of Finance since 1985, including the World Bank agent, Okonjo-Iweala.
Given the exceptional nature of Nigeria's debt problem, an exceptional solution is called for. A strong case can be made for debt cancellation phased over 2-3 years on the order of 80 percent, blowing the froth off the debt. A buyback of half of the remaining $6 billion of debt would leave Nigeria with $3 billion of the Paris Club debt, putting these creditors at par with the country's multilateral and commercial creditors.
If a non-political, businesslike approach had been taken to Nigeria's debt servicing, the first question that the Nigerian government should have asked is the indenture to the loan. Every loan carries an indenture, which dictates the terms of the loan. It spells out what projects were to be executed, to which companies the contracts were awarded etc. A review of the loan agreement would have revealed that the contracts were awarded to certain companies in America and Europe. These companies were required to be paid based on percentage of completion, and that being true, Nigeria ought to have asked the question, where are the projects for which $8 billion was paid that attracted almost $23 billion in interest and penalty? In essence, the bulk of these loans which the government of Nigeria is cajoling her citizens to rejoice for, never left the shores of some of the 15 countries that form the Paris Club.
Equally worthy of note is the long-standing strategy of these moneylenders. Once they lend us money, they usually lobby the IMF and World Bank for us to devalue our currency so that we would end up paying more than the amount owed by the percentage of the devaluation. For illustration purpose, if they lend us $1,000 and if we were to pay back at the then exchange rate of $1 to N85, we would have paid N85,000. But then the leaches would now call their brothers at the IMF and World Bank to instruct the Negroes at the helms of affairs in Nigeria to devalue. If we now devalue to N140 to $1, we would end up paying back N140,000 instead of N85,000. Do you see how much gain accrued to the master-creditors?
It is also instructive to know that the great United States of America owes a lot of money to China, Japan etc. But because, they have patriots running the affairs of their great country, and they know the kind of horses usually ridden to meet with other peoples’ mothers in camera, the U.S always borrows in her own currency. So if you go to the IMF or World Bank to ask the U.S. to devalue her currency, she has nothing to lose because she would still pay you the same amount of dollar borrowed from you. Now if you ask Chief Olu Falae, the Yale Graduate, or Ngozi Okonjo-Iweala, the World Bank expert, they would recite a politically motivated economic theory that is not employed in the writer’s country to explain why Nigeria could not borrow in her own currency. What a chattel!
Let me now diagnose the prescription of our economic doctors, the IMF and World Bank. The IMF/World Bank in Argentina told us about a decade or so ago that their prescription for Argentina will make them the envy of the World, and lay the frame work to get other nations out of debt and on the road to development. Today, it is crystal clear to every watching eye that their prescription killed Argentina financially, economically and politically. Like Nigeria, they appointed their slaves as Finance Ministers to administer the prescriptions. In the case of Nigeria, their agent Okonjo-Iweala never went to the table with Nigeria interest at heart. She thinks she has nothing to loose, in as much as she dances to the tune of those who pay her in dollars. Her insistence on being paid in dollar is extremely unpatriotic. More than any other factors, it underscores her lack of confidence both in Naira and in her own ability as well as that of the administration to save our rotten Naira. Just like her Master, the creditors, the more Nigerian Naira is devalued the better for her. This is similar to the Nigerian governors and president who have no reasons to build good hospitals with state of the art medical equipment and well-trained doctors in any state in Nigeria, because the hospitals in London, Israel, America and Germany were built for them. Why do they have to care about the rest of us? If Iweala had demanded to be paid equal amount or more of her salary in Naira, she would perhaps care about the value of our Naira.
If Iweala had the interest of Nigeria at heart, she should have called for due diligence on these loans to determine whether we truly owe the money. The president who respects court order on Babangida only but not the release of fund for the Lagos State local governments or on the restoration of Governor Ngige’s security details, should have been able to determine who and who siphoned the money and charge them to court for prosecution.
General Obasanjo said the debt relief is a dividend of his globetrotting and a product of Okonjo-Iweala’s ability to speak in their Master’s own tongue. Foul! I say it again, Foul! The leaders of all those countries that officially and genuinely received debt relief, including Ghana and Ethiopia did not waste the resources of their country to deliver to the Masters how well they are ruining their various countries to the contentment of the West. Chief Obafemi Awolowo, of blessed memory, successfully challenged the economic theories of the Europeans during his tenure as the Minister for Finance with the interest of his country foremost in his heart. He did not speak their language, yet he earned their respect.
All our rulers today develop inferiority complexes and stumble through life with a feeling of insecurity, a lack of self-confidence, and a sense of impeding failure. Fear of what life may bring outside government encourages them to sacrifice all of us to the powerful countries with mighty Army and wander aimlessly along the frittering road of selling their people for destruction. Why our rulers continue to trust these Europeans and their descendant worldwide, even with their records all over the world is cloudy to me.
Lo! Something about evil we must never forget, evil is recalcitrant and determined. It would never voluntarily relinquish its hold without a persistent, almost fanatical resistance. It would give you its agent that is called by your name “Okonjo” to help, which is why Muhammad Gaddaffi advised his fellow African rulers to discontinue begging, but they are not deep enough to understand. These beggars usually wait in the hall, while their Masters, the G-8, hold meetings on how they would render the assistance that pays them more than us. These are the beggars Governor Ahmed Bola Tinubu should take off the streets of our country and continent, not the ones that were compelled to become beggars by the wicked actions and inactions of their rulers. With this kind of mentality, the black race would continue to be regarded as an inferior specie of Homo sapiens and we would continue to be held in thrall and public odium
My pure gratitude to my good friends, Mr. Lateef Abassi, the Lagos state, NCP Gubernatorial candidate in 2003, Maze Olunwa Uzo, all the Masquerades who know all the traitors, but the traitors do not recognize them, and the Economist at the Brooking Institute, Washington, D.C for their contributions to this article and for helping with the investigation. With all of you on my side, I will keep kicking, even in my grave.
Posted To The Web On Wednesday, 07/27/2005
