Democratic Socialist Movement (DSM)

For struggle, Solidarity and Socialism in Nigeria

Committee for a Workers' International logo

Committee for a Workers' International

 

Home
Join DSM
Contact DSM
About us
Our Manifesto
Statements

Socialist Democracy

Newspaper of the DSM


Campaigns
NCP
Trade Unions
DSM News
Students
Women
International

Downloads

email

Socialist Democracy Nov - Dec 2005

 

PARIS CLUB DEBT DEAL

The Working People Must Resist Re-colonialism

By Peluola Adewale

The Obasanjo's government has concluded arrangement to cough up a huge sum of $12.4bn to the Paris Club of creditor nations. Already $6.4bn has been illegally withdrawn from the treasury without the prior constitutionally mandated approval of the national assembly and paid to an escrow account in Switzerland for onward transfer to the creditors after the rubber stamp of the national assembly is secured. This 12.4bn debt repayment is in addition to $42bn Nigeria has previously paid to the Paris Club for $13.5 billion original loan. Thus, in the final analysis, Nigeria would have paid altogether a sum of $54.4bn to the usurious creditors for $13.5billion debt and the so-called relief of $18bn! Besides, withdrawing $12.4bn in less than six months from a country widely assessed to be in dire need of huge investment to grow constitutes a suffocating deadweight on the economy. As disastrous as what this portends, the economic cost of the Paris Club deal is much more grievous and outrageous.

On Monday October 17 2005, Obasanjo's government officially submitted Nigeria to re-colonisation having signed agreement with IMF to dictate and monitor its economic reform under its Policy Support Instrument (PSI) (Reuter, October 19, 2005). This is the stringent conditionality attached to the deal. The Nigerian working people, urban and rural poor, youths and students must rise to protest against the resolve of this quisling government to plunge the country further into abyss of economic peonage of world imperialism. Rather than bring any succour, the deal will inflict more pain and pang on the already excruciating suffering of the Nigerian masses. Sadly, Obasanjo and his propaganda mills have misinformed Nigerians including labour leadership to take the poison gratefully.

However, Obasanjo himself, whose military dictatorship sowed the seed of debt burden before leaving office in 1979, while trying to pose as a friend of the masses in 1989 bemoaned the characteristic conditionality IMF and World Bank always attach to debt treatment. This was in the wake of the hated Structural Adjustment Programme being implemented by the Babangida military junta. He lamented, "Structural Adjustment Programme, SAP, was substituted for concepts like belt-tightening and austerity measures on the basis of de-control and market forces as prescribed by the IMF and the World Bank. This was in a bid to satisfy creditors whose postures seem to be consistently uncompromising, unsympathetic and unmindful of the prevailing political and social situation. For instance, in Nigeria, the implementation of SAP has meant exchange rate of about N0.60 to $1 in 1981 to over N7.50 to $1 in 1989. Other measures like withdrawal of subsidies and privatisation of government companies have been embarked upon. In short term and middle-term, the effect has been mounting unemployment, soaring inflation, poor public transportation, under-utilisation of installed capacities in the industries and agriculture, and a decline in the standard of living" (Newswatch, August 7, 1989)

Although, Obasanjo was revealing the baleful conditions of things under Babangida's regime, he was being instinctively prophetic of his present government. The picture he painted above, no doubt, is gloomy, but the reality that obtains today is much more scary. His government has inflicted the worst of economic hardship on the poor working masses in spite of having amassed fabulous oil and gas revenue more than any other regime in the last three decades. The inequality in wealth distribution is so sharp that the World Bank has to report that 80% of the oil and gas revenue accrue to just 1% of the population while 99% scramble to share out of the remaining 20%. This is why over 70% of Nigerians live below poverty line (i.e. below US$1 a day). Obviously, creditors are actually interested to get their own share from what they called exceptional oil revenue of Nigeria. As at November, this year excess crude oil revenue was put at $13billion while the foreign reserve was $30 billion. Yet, there is nothing to show for the windfall in terms of infrastructure, let alone the social services (education, health care, etc) whose provision the government has almost abandoned.

Obasanjo's government has stated that freed up $1billion that is normally paid annually to the Paris Club will be spent on education, health and infrastructure. This is a blatant deceit designed to drum up support for the death (debt) deal. Last year, the government that adduced $1.8 billion debt repayment to all the categories of creditors as the reason it could not adequately fund education and health care from the budget, shared among the tiers of government an extra sum of $2.9 billion out of excess oil revenue without appropriation and spent nothing out of it on the social services.

The government has brazenly refused to commit public resources to the provision of basic needs of people and rabidly implementing privatisation of government companies, commercialising social services, retrenching workers, etc on the basis of its neo-liberal economic reform, which has been endorsed by the IMF. This so-called economic reform being peddled around as homegrown is more vicious and monstrous than the SAP which Obasanjo then roundly condemned as lacking human face. Yet, the world imperialism wants more commitment of Obasanjo's government to the anti-poor economic programmes. This explains why the conditionality is imposed and the Paris Club will only cancel 33% of the "eligible" debt after the payment of $6.4 billion arrears as against 67% at once and defer the remaining 34% until March next year when the IMF will make its first review of Nigerian economic reform programme under its PSI (Reuter, October 19, 2005).

Nigerians must not submit cheaply to the second slavery which the Obasanjo's government, dominated by pro-imperialist politicians and technocrats, has almost plunged the country into. The perilous deal must be frustrated by putting up spirited popular resistance against anti-people pro-rich neo-liberal policies in all ramifications as we call for outright cancellation of the largely fictitious debt. Even, should all Nigeria's debts be cancelled, it will not automatically mean improvement in the lots of the poor working masses as long as the government that is run on the basis of capitalist neo-liberal philosophy holds sway. This has thrust to the fore the question of political power. Therefore, the struggle against debt enslavement and neo-liberalism is not total without linking it with effort to form a working people's political party that could usher into power workers and poor farmers' government run on socialist programme. Such government will enable public ownership of the commanding heights of economy and main resources of nature firmly placed under democratic management and control of the working people themselves and thus guarantee food, housing, education, health care, electricity, water, decent jobs, etc to the poor masses.

 

 

 

Socialist Democracy Nov - Dec 2005