Over several decades, a succession of military dictatorships in Nigeria incurred a massive debt burden that is currently crippling the nation. Now, Nigeria’s new democratically elected President Olusegun Obasanjo is fighting for the cancellation of those odious debts.
According to the president, at least half of the country's debt is dubious: "the people who gave those loans knew that the money wasn't being spent wisely. Perhaps they even took their own cut. Yet the ordinary people of Nigeria have to pay back that loan. This is the injustice of it all . . . our debt is immoral." (See Jubilee 2000 interview).
Soon after coming to power, the president began legal actions to recover funds stolen by corrupt leaders (see Mail & Guardian article). A significant portion of this money remains hidden in secret western bank accounts and Obasanjo has criticized some western nations for not doing enough to assist Nigeria in the recovery of these funds (see Jubilee 2000 article).
Nigeria’s debt problem has become so serious that in May 2001 the country’s Debt Management Office organized an International Conference on Sustainable Debt Strategy to deal with the issue. The conference was attended by the president and members of his cabinet, as well as representatives from International Financial Institutions including the World Bank and the African Development Bank.
The report on the proceedings of the conference concludes that Nigeria’s debt crisis is only a symptom of larger economic problems. One important problem is that the rules of international finance “encouraged odious debt to accumulate . . . and stolen wealth to be stored in the western countries and offshore financial centres.” There was a broad consensus among participants of the conference that “the debt crisis is a shared responsibility between Nigeria and the creditors, and that creditors are as guilty as Nigerians in the accumulation of the debt.”
The report calls on the international community to 1) cancel the country’s debts; 2) reform global financial structures to ensure that looted funds cannot be hidden in secret offshore accounts; 3) adopt adequate laws for the punishment of looters and their foreign collaborators; and 4) set up an international arbitration court to adjudicate disputes between donors and creditors.
Finally, conference members proposed that the government of Nigeria undertake a broad audit of each of the programs for which loans were incurred in order to verify the legitimacy of the debts being serviced. Information from these audits could then be used to prosecute the government officials responsible for contracting the odious loans.
