Global Policy Forum

By Peter Cunliffe-Jones

US President Bill Clinton will come under pressure next weekend to provide more than words of support to Nigeria on its massive debt burden when he visits Africa's most populous country.

Nigeria's international debt is estimated at around 30 billion dollars, of which 17 billion is owed to Paris Club creditor countries, and the rest to the London Club of commercial banks. Of its Paris Club creditors, Washington remains one of the most influential, and a power in the IMF and World Bank that influence other creditors, including Britain, France, Canada, Germany and the Netherlands.

Since coming to power in May last year, Obasanjo has led a vociferous campaign for relief on the country's debt payments, either through a write-off or a rescheduling of its debts. And speaking to the Nigerian press last week, Obasanjo said he expected support from Clinton during his visit here scheduled for August 25-27. "Let me say on Mr. Clinton's visit that there will be a very definitive statement on debt relief," he said.

Obasanjo's main complaint is that the debts built up by the country, amounting to almost 75 percent of annual GDP, were accumulated largely under the corrupt military regimes which ruled Nigeria from 1983 to 1999. With its economy left in tatters by the misrule of those regimes, and average Nigerians earning just 320 dollars per year, Nigeria cannot now afford to pay back the money misspent by past regimes, he says. "Much of the money we are supposed to owe was knowingly lent by foreign powers to regimes whose leaders then stole the money and sent it back abroad to private accounts. "Where is the justice in asking the poor of the world to pay for that?" Obasanjo asked recently.

The constant need to make debt payments limits the new government's capacity to provide the long-suffering Nigerian people with a "democracy dividend" -- of government spending on road, schools or health facilities, he says. Earlier this year, Obasanjo took up the chairmanship of the Group of 77 developing nations and in that role attended the G8 summit in Japan last month, alongside the leaders of South Africa, Algeria and Thailand.

Obasanjo urged the leaders of the world's leading industrialised nations to do more than offer fine words on debt. "It's no longer a question of what we should do. We all know what we should do. The question is whether we have the political will," he said. However, the G8 leaders made promises of support but agreed no concrete steps and after the meeting, Obasanjo expressed disappointment. "The fact that these people are saying essentially the right thing is good because if somebody is saying the right thing you can hold him to what he is saying when the time comes," Obasanjo said, "but nevertheless it is disappointing".

He also acknowledged that Nigeria, which has earned and squandered billions dollars from the oil industry over the years, would also need to demonstrate it was putting its put its own house in order. "We have to be seen to be doing the right thing in terms of the management of our affairs, politically, economically and socially," he said. "Then we can be able to say that, yes, if we get debt reduction, if we get debt cancellation, we are going to use the money properly, we are going to use the money to alleviate the poverty and suffering of our people, we are not going to siphon the money into Swiss banks."

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