Following largely Russia’s recent steps, the Obasanjo government last April paid off its dominant creditors — mostly western governments under the aegis of the Paris Club — thereby regaining the policy independence Nigeria lost some two decades ago. Besides huge resource transfers to the creditors by way of interests and penalties which came to dwarf the principal, Nigeria, like any other heavily indebted country, lost policy independence to creditors on a bilateral basis and through the International Monetary Fund (IMF) and World Bank which Paris Club members dominate. This, expectedly, is a card being trumpeted in the campaign to prolong Obasanjo’s rule through constitutional amendment just a year to the end of his final term under the current constitution.
Undoubtedly, with steroid oil prices on its side, the government has achieved what its five predecessors could not over 17 years. Much of the credit goes to Obasanjo who ruthlessly exploited his international statesmanship, what some call his `native intelligence’ and a deep understanding of the politics of bilateral financing, sometimes to the point of blackmail. These enabled him to recognise and optimise the opportunity high oil prices wrought. Realising after four years of failed promises from and shifting goal-posts by his international friends that Nigeria could only get debt relief from a position of strength, he ordered the building up of external reserves, with some oil earnings in excess of the budget. The reserves mounted and by end-March 2006, at $37bn, had exceeded the total external debt (still) estimated at $35bn. It was this show of strength, not improved governance, transparency or any of those buzzes of the international community’s, that got Nigeria its debt relief which amounted to paying $12bn for an $18bn write-off. Western creditor governments, whose companies dominate
Nigeria’s oil and non-oil sectors, simply realised that a frustrated Obasanjo could wake up one day, pay off the entire debt and informally turn off their longstanding leverage. Obasanjo himself made such suggestive noises and even outsiders know what it is to get on his wrong side.
Once Abuja’s strategy became clear, creditors fast forwarded everything, even the policy support instrument from the IMF upon which they had apparently hinged their final approval. The bottom-line is that while much of the roughly $130bn oil earnings in the past seven years have been frittered, the government optimised some to shed the debilitating debt burden.
Yet history and sages have taught that the best time for change is when a winning team has completed its defined tenure. It does not matter whether the team has been an all-round success, because everything has its defined place and time. In this instance, the team cannot even claim all-round success. Nigeria is in a bad shape, politically, economically and socially.
Politically, independent Nigeria is experiencing its first rebel violence since the 1967-70 civil war, with militants of the oil-bearing Niger Delta capturing expatriate workers at will and even planting a bomb right in an army barracks. Economically, electricity upon which modern advances depend is worst supplied than in 1999; it is now a miracle when the bulb lights. Mass transportation remains a manifesto of the government’s.
The president argues that having focused on debt relief, he now requires more time to face domestic issues. That, however, is like Russia insisting on prolonging its G8 chairmanship to exhaust its agenda.
The truth is that every incumbent of an office must define what constitutes his agenda within his allotted time and endeavour to achieve as much of it as possible. It was Obasanjo’s prerogative to focus on debt relief and it is to his credit that he has achieved it. Someone else might have decided to focus on domestic rehabilitation and paid off the debt, in full, from a strong economy. It is a choice. The president should remember that more than anything else, it is the shifting of the goal-post by sit-tight rulers that has plodded Nigeria from crisis to crisis.
Besides, whatever he has accomplished
abroad, his temperament seems unsuited to
the internal healing Nigeria needs right now.
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