Nigeria payment of foreign debt: The largest transfer of wealth in modern time

Published on, by Emeka Chiakwelu, 09 Apr 2009.

Nigerian government in the year 2006 paid almost $20 billion to two giant international syndicates: Paris Club and London Club of Creditors to settle her foreign debts. This transfer of wealth by a relatively poor nation contradicts the entire prudent financial judgment and rudimentary economic disposition preached to Nigeria by the rich donor nations that babbles about the ills of capital flight in developing nations.

The government of President Obasanjo, the Nigerian ex-Head of state made the arrangement and secured the purported $18billion debt relief for Nigeria from the Paris Club of Creditors, which became the inducement for the country to pay off her $36 billion foreign debt. Nigeria’s total foreign debt stood at $35.916billion as of June 2005. The largest chunk of the debt $31billion was owed to 15 of the 19 creditor-countries of the Paris Club … 
… It’s perplexing to comprehend why Britain’s former Prime Minister Tony Blair refused to adhere to the appeal from eminent personalities of Desmond Tutu and Trisha Rogers caliber. The then Prime Minister Tony Blair had good credentials on Africa. He highlighted Africa in his leadership of G8 in 2005 and said that Africa’s plight was “a scar on the conscience of the world.” He also championed the cause of Africa with the formation of the Commission for Africa. During his leadership of G8 he recommended massive aid and debt remission for Africa, which has not been fully implemented due to the reluctance of some of G8 nations to oblige to their pledges. Africa is a continent beset with dire problems – Diseases, wars and instability are ravaging the continent. The least thing Africa needed is enormous capital flight. Every penny is needed to curb the problems and alleviate quality of life in the most populous nation in Africa. Britain and Blair understood Africa’s political landscape and indeed Nigeria; particularly its sociological-economic needs more than the rest of the G8 and Paris Club members because of her colonial rule in Nigeria. Yet they participated in sharing the wealth from poor Nigeria.

The billions of dollars that Nigeria paid was larger than the donations the rich nations will be providing to poor countries in a period of ten years. The money paid to the rich nations of Paris Club and London Club of Creditors would have found its best use in Africa, if not in Nigeria. (full text).

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