Politics of Debt

Is it not strange that a creditor prefers the debtor servicing his debt to the outright liquidation of the debt? But that is a question the government is confronting in dealings with the external creditors.

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On Monday, Finance Minister Dr. Ngozi Okonjo-Iweala spoke against the "obnoxious rules and regulations of the Paris Club" regarding debt payment and rescheduling. A greater percentage of Nigeria's $33 billion debt is owed to this club of creditors. Okonjo-Iweala, therefore, hit the nail on the head when she says that allowing "countries with smaller debts to pay them off rather than rescheduling them" would help the "growth and development of those countries." She was referring to the debt Nigeria owes Finland which falls into the category of "smaller debts' that should be paid off. The sort of views expressed by the minister ought to be popularised and supported by ordinary Nigerians who are the real debtors since they bear the brunt of endless rescheduling and payments.

No matter the reservations that popular democratic forces may have about the other views of our neo-liberal reformers, their position on debt is ultimately in people's interest.

Earlier in the year President Olusegun Obasanjo himself had expressed similar feelings saying that debt peonage had brought some governments down in other parts of the world. He even offered that if getting him out of power is the ransom the creditors want in Nigeria's case, he would not mind the sacrifice.

Now, the political economy of debt is not a new one. Across the globe, those who have a progressive worldview of global economic relations saw it coming. They always know that the debt trap is conscious imperialist trap to hold poor countries to ransom. Almost 20 years ago, Cuban leader Fidel Catro made a historical survey and declared the third world debt "unpayable and uncollectable". About the same time, the late Tanzanian statesman and patriot, Julius Nyerere, echoed the same feelings. They pointed to the fraud in the computation of the debts, in thefirst place, and concluded that debts were no more than instruments of holding poor countries in neo-colonial bondage. If all these sounded like idealism and some empty leftist rhetoric then, the reality is dawning on even our neo-liberal experts that the western strategy on debts is simply anti-development.

It is not enough for them in the West to point to the looting and mismanagement of resources by third world leaders as an excuse to refuse debt relief and even cancellation. That is only an aspect of a crippling reality. The problem of graft at home does not justify the inhumanity from abroad.

The government should, however, realise in earnest that it needs more than before to cultivate popular-democratic support at home in order to outwit the creditors in their impossible conditions and regulations on debt.