USA/Africa Dialogue, No 399: Debt forgiveness

Since diplomacy is the best way to resolve disputes, Finance Minister, Ngozi Okonjo-Iweala was recently in Britain, where she called on Europe to back the proposal of Gordon Brown, the British Chancellor of the Exchequer, to forgive Nigeria’s debts. She went to London for the purpose of reporting on the federal government’s pilgrimage to the eradication of corruption and curtailing of poverty.

During her visit, she made a strong argument for the cancellation of the nation’s debts by furnishing her audience with the revelation that Nigeria owed 32 billion U.S. dollars with much of the debt being owed to the members of the Paris club. Through a statement signed by the Special Assistant to the minister, Mr. Paul Nwabuikwu, the Ministry of Finance obliged Europe with the information that about 1.7 billion dollars is yearly dedicated to serving Nigeria’s debt.

According to the statement, the giant of Africa gets only two dollars per capital compared to a mean figure of twenty-eight dollars per capital for other sub-Saharan African countries.

To bolster her urgent campaign for debt cancellation and drive the message of her visit home to her European audience, the minister dramatically exercised her right to peaceful protest. The former World Bank Vice President joined forces with anti-debt campaigners, numbering about ten thousand. The anti-debt rally, which held at the symbolic Trafalgar Square, was entitled “Make Poverty History”. Of course, the minister was in agreement with the campaigners, as she believes that there exists a clear nexus between poverty and debt. She reportedly carried a placard to demonstrate her grievance.

The prevailing reasoning in Third World circles is that African countries will remain under-developed as long as wealthy creditor nations “deny” them development by means of burdensome debts, which in a never-changing manner harm their capacity to address real problems that confront them. It is always cited that huge monies that could be used in combating poverty and under-development by African nations are used in settling debts owed the Paris club.

Not surprisingly, the Time magazine’s heroine among others of 2004 was impressed with the turnout and zeal displayed by the campaigners, which goes to exhibit the global appeal of the anti-debt campaign. She said: “I am very impressed with the youthful and committed nature of the crowd that attended. These people have come out on a wet gray London day to show their anger at the injustice of the world poverty and assert that they want things to change. Let us get rid of cynicism and let us meet the challenge of making poverty history.”

The minister was apparently greatly encouraged by the campaigners’ display of solidarity for her seemingly noble cause. However, the arrowhead of reforms must not forget that the war on corruption has a direct relationship with a credible campaign for debt forgiveness. That is due to the prevailing negative image that has encompassed Nigeria with respect to corruption. Nigeria is currently regarded as one of the most corrupt countries in the world and Transparency International has, yearly, provided scientific basis for the ugly perception.

Indeed, the former United States government official, Suzan Rice, recognised that blemish when she reportedly said that Nigeria is too poor to be rich and too rich to be poor. Worse still, the government under which Okonjo-Iweala serves is perceived as an outpost of corruption.

True, Nigeria is stigmatised for the profligacy of corruption perpetrated under Obasanjo’s watch. And the envelope of Nigeria’s corruption spans from the case of a missing ship to the alleged stealing of billions of Naira from the nation’s top police officer. Indeed, Okonjo-Iweala may have no credible case for debt cancellation with all these contradictory flaws, which give the impression of Nigeria as a rich nation, whose wealth is stupidly mismanaged by its rulers. How can government overcome this stigma? The war on corruption must be won before the Paris club can take Nigeria seriously