Let the thieves pay
By Okey Ndibe
For the third time in as many weeks, I feel drawn back to the issue of Nigeria's debt burden, often estimated at more than $30 billion, and strategies for handling it. In my first two columns, I made the point that the much-touted debt deal from the Paris Club was little more than a scam, and should be rejected by Nigerians. It is shameful when Nigerian officials openly misrepresent a financial swindle by a club of clever Europeans as a breakthrough in debt relief. It bears restating that there's neither rhyme nor reason to President Obasanjo's plan to surrender $12 billion from Nigeria's foreign reserves to the Paris Club even before real negotiations begin. Stripped of all verbiage, that plan amounts to paying billions of dollars for the privilege of sitting down to negotiate. A seat that costs that much is not worth it.
Nobody in Abuja has disputed that Nigeria originally borrowed something in the region of $17 billion from the Paris Club, and has since repaid in excess of $22 billion. If these are facts, then the so-called $30 billion debt to the Paris Club is, as Chinweizu has suggested, nothing more than "book-keeping debt" or "virtual debt." In other words, it is debt that exists only theoretically, not in reality. Should Nigeria throw in another whopping $12 billion, officials of the Paris Club would be ecstatic about their windfall and quietly amazed by the prodigal ease with which Nigeria's leaders parted with hard cash.
I concede that this line of reasoning could be countered legalistically. It may well be true that those Nigerian officials who negotiated these loans appended their signatures to documents that contained terms perilous to their nation. Nigeria is cursed with "leaders" who are foolish in the things that count, and wise only in all the wrong ways. They would forget that the world of finance, whether run by local bankers or international lenders, is populated with sharks and vampires, predators adept at the mindless pursuit of lucre. Without question, past (and conceivably present) Nigerian governments often sent ill-schooled officials to negotiate loans with sharp-minded creditors, including the (ironically named) Paris Club. Nigeria may today be haunted by the spectre of disastrous decisions its officials made, and still make.
Still, the nation's predicament calls, not for weak-kneed docility and submission, but for astute leadership in dealing with creditor-sharks. Such hard-edged sagacity, sadly, is absent in Abuja. President Obasanjo, who often evinces a facility for misjudging portents, has suggested that one benefit of securing a debt deal is that Western creditors would thereafter let Nigeria be. The odds are that his calculation would prove gravely misconceived. When sharks find out that you can be coaxed into giving up your lunch (in this case, $12 billion), they might be emboldened to demand that you give up your breakfast and dinner as well. The fix for gluttony does not lie in feeding the glutton; instead, the glutton must be compelled to scale back his appetite.
How do these speculations bear on the weighty subject of debt relief? Rather directly, I'd suggest. In dealing with creditor nations and institutions, Nigerian officials, from the president to Finance Minister Dr. Ngozi Okonjo-Iweala, must come equipped to out-think, out-negotiate, outwit and out-manouevre sharks. To achieve the feat, Nigerian leaders must master the guile of thinking outside the box, or of using the creditors' logic against them.
They must stress the fact that, in simple arithmetic terms, Nigeria has paid back far more than it borrowed. With millions of Nigerians threatened with starvation and disease, there is no justification for effecting a massive transfer of billions of dollars to economies already awash in prosperity. The scandal is that, in one crucial sense at least, Nigeria in actuality borrowed little or nothing. What do I mean? Simply that, like their counterparts in other African nations, Nigerian "leaders" often stole the borrowed sums and wired them back to Western banks. Think about the execrable examples of Zaire's Mobutu Sese Seko, Equatorial Guinea's Macias Nguema, Central African Republic's Jean Bedel Bokassa and Gabon's Omar Bongo. Like them, contemptible Nigerian officials were unconscionable in their graft. And like other hall of shame members of Africa's club of looters, Nigeria's military and political elite funnelled their loot to foreign banks. They did this, quite clearly, with the complicity of rich Western governments. In effect, then, Nigeria has been twice handicapped. Much of the nation's loans were secured fraudulently, often for projects that were will-o-the-wisp. Then the funds were diligently and immediately returned to the vaults of the creditor nations. These wealthy nations, while utilising the stolen funds in the transformation of their economies, also began to collect generous payments on the so-called loans.
Obasanjo and Okonjo-Iweala cannot be blind to this history of how Nigeria accumulated "bastard" loans. They are well informed, we must believe, in the conventions of the scam that gave Nigeria its huge debt burden. They must then jettison the habit of grovelling before the Paris Club (and other creditor clubs). Instead, they should champion a new, radical approach to addressing the debt crisis. If Obasanjo is serious about securing real debt relief (but one has serious doubts on that score), he should start by catalysing a different discourse on debt. He should fashion a two-pronged assault that holds Nigeria's corrupt officials to account and also indicts the rich West for its role in Nigeria's underdevelopment and dispossession. Does this president possess the moral credentials and intellectual stature to mount such an assault?
A few days ago, I received an e-mail from an American friend who closely follows Nigerian affairs. It read: "President Obasanjo has had the list of high placed thieves that the Paris Club gave him for three weeks or more. It was supposed to be a condition of the deal that Obasanjo drown the thieves. Who are they? Do we find out after Obasanjo leaves office, if ever?" I juxtaposed that apt reminder with a reporter in Daily Champion of July 15. The paper's headline read: "$18bn Relief: Arrest Money Launderers - Paris Club". The report bears quoting at length: "Some highly placed Nigerians allegedly involved in money laundering and other economic crimes are to be arrested and prosecuted under a recent understanding reached between the Federal Government and the Paris Club of creditors." Who was the source of this disclosure? According to Champion and other Nigerian newspapers, it was the president himself. As the Champion put it, "President Olusegun Obasanjo who dropped the hint in
Abuja yesterday, said the measure was among the conditions handed down to Nigeria by the club before it granted $18 billion or 60 per cent debt relief to the country."
In making this important demand, the Paris Club unwittingly played a card that Nigerian officials might have exploited to devastating effect. Our officials, one regrets to say, failed to seize the moment. But it's not too late. With the list of rogues at hand, Mr. Obasanjo ought to do three things. First, he must unmask the culprits to the gaze and contumely of the Nigerian people. Second, he should with urgency instruct the appropriate officials of his administration to commence legal prosecution of the whole sleazy bunch. Third, he should tell all creditors that any payments to them will be tied to their full cooperation with Nigerians' efforts to reclaim their patrimony hidden in Western banks.
Sheer economic logic would dictate certain reluctance by members of the Paris Club to release Nigeria's billions starched in their banks. Since the days of slavery, European and North American economies have thrived on the dispossession of Africans. Of course, Africa's cast of misbegotten rulers, driven by greed and self-aggrandisement, always act as willing tools in schemes that reduce their peoples to servitude and destitution. By holding on to funds lodged by African officials, European nations perpetuate the tradition of symbolically gorging on the entrails of Africans. One test of exemplary African leadership would be its preparedness to confront this tragic equation of Euro-African relations, and demand that it be changed. If Nigeria is to be revitalised, its leaders must cultivate habits of moral and intellectual nimbleness. Few people would mistake Obasanjo (or most candidates currently clamouring for the top job in 2007) with that kind of leader, but hope (we must hope) springs eternal. At any rate, if they are not to abet the selling of Nigeria to Europe's rich and greedy nations, Nigeria's leadership must insist that no dime will be paid unless and until all of Nigeria's misrouted fortunes is returned.