For more than five years now, the President of the Federal Republic of Nigeria, Chief Olusegun Obasanjo has been making trips around the world soliciting for debt relief for Nigeria, which has been under severe debt burden since the mid 1980s. On the domestic front, Mr President has led the country to embark on a well-articulated and comprehensive economic and social reform programme mainly captured in the National Economic Empowerment and Development Strategy (NEEDS), whose main goals are wealth creation, employment generation and poverty reduction achieved in the context of a positively re-oriented value system.

Tremendous progress has been made in entrenching transparency, accountability and efficiency in public expenditure; the budgetary process has been fundamentally transformed and fiscal discipline has continued to improve over the past four or so years; new anticorruption agencies have been established and strengthened alongside the existing ones. Indeed, the Nigerian Government and the Nigerian people have over the past five years done all that is humanly possible, and have actually registered achievements towards establishing the economy on a path of sustainable growth despite the enormity and complexity of the constraints it faces. These achievements would have been considered unimaginable before 1999. Despite all these efforts and achievements, Nigeria’s creditors and development partners have failed to provide her with the needed support and encouragement, particularly, by granting the country some substantial debt relief to enable her progress on and consolidate the important economic and social changes it has introduced.

It is important to consider some of the salient facts and circumstances surrounding Nigeria’s external debt:

• Despite Nigeria’s efforts at servicing the external debt, the country has been trapped in a vicious cycle of accumulation of arrears and penalties as it cannot afford to pay the full amount due each year, thereby leading to a growing debt stock beyond additional disbursements. For example, although Nigeria’s total external debt stock in 1985 was about $19 billion, between 1985 and 2004 the country had made debt service payments amounting to about $37 billion to all creditors including Paris Club creditors; yet as at end-December 2004, the debt stock outstanding to all external creditors was about $35.9 billion.

• This shows that Nigeria’s external debt burden is unsustainable in comparison to available resources and taking into account competing and compelling needs for the development of socio-economic infrastructure.

• Indeed, independent analytical studies by the International Monetary Fund over the past few years have led the organisation to conclude that Nigeria needs at least a 67percent debt reduction for her debt burden to be sustainable

• Debt Service payments encroach on resources needed for socioeconomic development and poverty reduction.

• Over the past five years, annual debt service payments have been multiples of budgetary allocation to education as well as to health.

• If Nigeria were to fully pay the debt service due each year over the next five years which amounts to about three billion dollars per annum, there would be very little left for capital expenditure taking into account that we also have to service the domestic public debt.

• Continued resource outflows through debt service payments will prevent Nigeria from achieving the Millennium Development Goals (MDGs) which were set by the international community for the purpose of reducing poverty levels by 50percent by the year 2015.

• For 15 years up to 1999, Nigeria was under military dictatorship. This had devastating impact on the economy and social stability and places Nigeria in the same category as countries emerging from war and who usually receive debt relief.

• The restoration of democracy in Nigeria has been accompanied by a revolution of expectations from the people for improvements in their standards of living; if these legitimate expectations are not met because of the resource drain occasioned by unbearable debt service payments, the survival and consolidation of democracy would be threatened.

• Although Nigeria is an oil exporting country, it is not a rich country as wrongly held by many: oil revenue per capita per day is only 50 cents which is much lower than the poverty line defined as one dollar per day.

• Nigeria’s oil revenue per capita per day of 50 cents, compares very unfavourably with Iraq’s 2.4 dollars, Venezuela’s 3.4 dollars and Kuwait’s 27.3 dollars.

• Nigeria’s per capita income hovers around $300 making it among the poorest in the world and placing it among the group of debtor countries that are being provided with substantive debt reduction by Western creditors under the HIPC initiative.

• The UNDP Human Development index scores only Nigeria 40 percent, meaning that the country is among the most deprived in the world in terms of standard of living of its people.

• The G8 and the Paris Club have in the past, on a case by case basis, favourably considered and provided debt relief for countries which are economically better off that Nigeria. These countries include Poland, Yugoslavia, Cote d’Ivoire, Pakistan and Egypt.

• Recently, for Iraq, Western creditors have packaged a comprehensive debt relief of 80 percent of their total indebtedness, starting with an immediate cancellation of 30 percent of the debt stock.

• Nigeria has continued, on behalf of the international community, to play a lead role in peacekeeping and conflict resolution in Africa (Liberia, Sierra Leone, Cote d’Ivoire and Darfur) involving material costs worth billions of dollars, as well as enormous time and energies and priceless loss of lives of some of its troops.

Clearly, therefore, all nations and stakeholders concerned ought to reconsider the necessity and urgency in granting Nigeria debt relief.