Abuja Did the Right Thing – Jubilee Research

By Toye Olori

Jubilee Research, the official successor to Jubilee 2000, yesterday praised Nigeria’s decision to defer some debt service payments and prioritise the needs of her people over the interests of her foreign creditors.

Ann Pettifor, co-founder of Jubilee 2000 and director of Jubilee Research at New Economics Foundation (NEF) said: ''The decision … is welcome. We call upon the international community, gathered in Johannesburg to prioritise sustainable development, to support Nigeria in this very difficult decision.

''Co-responsibility for Nigeria's debts rests with those bankers and governments that lent recklessly in the past to corrupt Nigerian regimes. Much of Nigeria's debt is a legacy of delinquent lending by international creditors, and corruption by former military dictators. Today the people of Nigeria are being forced to pay the price of the secretive and irresponsible actions of international bankers and past military dictators.''

Nigeria's democratic government is carrying 34 billion U.S. dollars in debt racked up by previous dictatorships and large amounts of the country's reserves are deposited in foreign banks as a result of capital flight. The late General Sani Abacha alone allegedly stole and deposited 4 billion dollars in Western banks, in London, Washington and Switzerland. Nigeria is paying back creditors at a rate of 3 billion dollars a year.

''We describe the huge foreign debts owed by Nigeria as a Phantom debt, because most of the amount said to be owed by her is not real. It is the accumulation of unpaid interests over the years. The debts should be held onto by the Nigerian government and used for human development, but such developments should be very transparent,'' she told Terraviva.

Half of the stock of Nigeria's debt, she explained consists of added compound interest on debts that were unpaid by military leaders. ''Now that Nigeria has a democracy, creditors, like vultures, are moving in on her elected government and impoverished people''.

On the refusal of creditor nations and organisations to forgive Nigeria's debt because she is rich, Pettifor told Terraviva: ''Nigeria is a big country with a population of more than 120 million. If you share the oil money equally to the citizens, each will get less than 27 cents. How can one say that the country is rich when the majority of people live below the poverty level of 1 dollar per day?''.

Nigeria, because of her low human development indicators and substantial debt burden, was initially (in 1996) defined by the World Bank and IMF as eligible for debt cancellation under the HIPC initiative. But she was subsequently removed from the list, for unexplained reasons.

''Nigeria ranks 151st out of 174 countries on the HDI poverty index, but its creditors are still demanding 15 times in debt service what it is able to spend on poverty reduction. For Nigeria to meet Millennium Development Goals set by the United Nations for the year 2015, it needs to spend about 11 billion dollars per year on social services - well above present levels and nearly double what Jubilee Research considers to be reasonable given the taxing capacity of its poor population,'' she said.