Introduction
Until recently, a debt overhang of US$35.94 billion dominated Nigeria's economy. The Debt Management Office of Nigeria estimated that the country had paid out over US$35 billion as cumulative debt service payments on its original loans of US$13.5 billion (Business Day 2004, p. 1, Falana 2005). Added to this were hard-to-quantify costs of imposed reforms and adjustment programmes on the country and its people.
On the 29 June 2005, the Paris Club of creditors, which accounts for US$30.8 billion representing 85.82 per cent of Nigeria's debt, granted the country debt relief to the tune of US$18 billion. However, it demanded that Nigeria should pay US$12 billion, in two equal instalments at designated times, to give impetus to this debt relief deal. In the event, Nigeria paid off this debt in three (rather than two) tranches, but within the time frame specified by the Paris Club.
The Nigerian Government has been wallowing in self-adulation, describing the debt relief deal as a resounding approval of its economic reform programmes and the impetus needed to trigger the forces of economic growth and development. For one aspect, the government would use the resources freed from suspended debt service obligations to provide a wide array of infrastructure necessary for economic growth. For another, Nigeria would regain its sovereignty, which had been surrendered to the international financial institutions (IFIs), especially the IMF and the World Bank, during the country's descent into economic purgatory.
Most Nigerians do not share this optimism. They see the debt relief package as an imperialist rip-off, designed to strip the country of the accumulated US$24.37 billion in its external reserves as at June 2005 (CBN Economic Report 2005, p. 6). They consider the debt deal more of a relief to the creditors than to Nigeria as the former needed the money to shore up their dwindling resources occasioned by high oil costs in the international market. They also see the deal as a hastily packaged strategy by the Paris Club to extract a reasonable chunk of its outstanding debt before the probable disintegration of Nigeria predicted by US Intelligence Report of January 2005.
Is there any merit in these diametrically opposed positions? Within the context of an interdependent global economy, Nigeria's economy is essentially enclave and peripheral, due to its stunted productive base, monocultural economy, specialisation in the production of primary commodities and incapacity to compete in the global market place. It is entirely dependent on crude oil, which accounts for 96.3 per cent of total export proceeds (CBN Annual Reports 2004, p. 81). Classically, peripheral or enclave economies are non-industrialised economies whose major contributions to global trade are restricted to agricultural goods and natural resources. Essentially, these products are sold, either completely unprocessed or only partly processed, to industrialised countries of Europe and America and, in recent times, newly industrialising countries (NICs) of Asia, for further processing and refining.
Ordinarily, the enormous endowments of Nigeria – large population, vast oil reserves and a wide array of solid minerals – are the right ingredients for economic growth and development; unfortunately, these have neither impacted positively on, nor led to the transformation of, the economy. Indeed, the Nigerian economy is haunted by structural defects (undiversified, monolithic and monocultural production base), institutional distortions (weak institutional capacity for economic policy management and coordination among the tiers of government, debt overhang, macro-economic policy inconsistency, instability and policy reversals, public sector dominance in production and consumption and corruption) and inadequate infrastructure base (constant power outages occasioned by inadequate generation of electricity, bad roads, moribund rail system and poor healthcare delivery system) (Donli 2004, p. 13, CBN Briefs 2004–2005, p. 55). The contradictions in the Nigerian economy are due less to the manner of its incorporation into the global capitalist economy than to the poverty of ideas of its leadership and other members of the elite. Thus, even with US$43.69 billion in its external reserves (as at April 2007) following the liquidation of both its Paris Club and London Club debts totalling over US$15 billion, the country's currency remains unstable and its economy acutely dependent. That the Nigerian economy is a peripheral economy is not in doubt; what is debatable is whether the sovereignty reclaimed from the international financial institutions (IFIs) as a result of debt freedom, and the good run of oil prices in the international market, could be effectively utilised to facilitate its exit from peripheralism.
Is the optimism that debt relief alone can lead to economic development justified? Taken together, the quality of leadership, nature of Nigeria's economy, the reality of its position within the global economic order and the complex interplay of capitalist forces of subordination and super-ordination, do not point to any likelihood of economic growth and development purely because of debt relief granted by the Paris Club. This article highlights how elite politics, in an attempt to perpetuate the ruling elite in power, generated self-interested support for, while encouraging the politicisation of, the Paris Club debt relief deal.
Walking a Tightrope: Debt Entrapment and Efforts at Debt Alleviation
Between 1973 and 1976, Nigeria was a viable economy: from 
1016 million in 1973, its earnings rose to a fabulous 5365.20 million in 1976 (CBN Statistical Bulletin 2002, pp. 203–205). During this period, Nigeria's level of indebtedness did not exceed 500 million, with 78.5 per cent of this amount consisting of soft loans on concessional terms, while debt service obligations were well within the country's means. A change occurred in 1977 when Nigeria contracted its first jumbo loan of 600 million (US$1 billion) from the International Capital Market (ICM). The terms were 1 per cent above the London Inter-Bank Offered Rate (LIBOR), with repayments spread over eight years, including a period of grace of three years. In 1978, Nigeria contracted its second Euro-dollar market loan, this time for a sum of 734 million (US$1.145 million). The conditions were similar to those for the first loan, except that interest was 1 per cent for the first four years and 11/8 per cent for the remaining four years (Aluko-Olokun 1989, pp. 198–199).
The enormous earnings from oil neither empowered the people nor spawned the necessary conditions for economic development. Rather, it created and sustained sets of parasitic, rent-seeking elites whose penchant for primitive accumulation asphyxiated productive enterprises and promoted mindless importation of what had hitherto been produced in Nigeria. Schatz captures it thus:
For the most vigorous, capable, resourceful, well-connected and lucky entrepreneurs and potential entrepreneurs (including politicians, civil servants, army officers, etc.) productive economic activities, the creating of real income and wealth, has faded in appeal. Access to and manipulation of the government spending process has become the golden gateway to fortune. (Quoted in Ikpeze et al. 2004)
1.2 billion a month, a figure that was maintained into the first quarter of 1982. Not surprisingly, the collapse of the price of oil in 1982 led to a serious balance of payments crisis.Even though visionless leadership, outright looting, corruption, policy reversals and structural rigidities created Nigeria's debt, the effective entrapment of Nigeria in the cesspool of debt peonage was achieved via the imposition of a structural adjustment programme (SAP). The conditions associated with SAP created certain contradictions that made it impossible to meet debt obligations; and, with new loans contracted for the rescheduling of old ones, entrapment was consolidated.
The role of the IMF in assisting countries with debt problems was not a new one at the time Nigeria's debt crisis erupted. For countries experiencing a debt crisis and desirous of debt rescheduling and financing, there was, as the Washington Consensus held, no alternative to SAP. The most destructive aspect of SAP on the Nigerian economy was the Second Tier Foreign Exchange Market (SFEM), which deepened the country's debt problem, effectively destabilising the economy and intensifying its dependence on the vagaries of global markets and the fortunes of western creditor economies. The Nigerian Naira went into freefall in SFEM, so that instead of the 60 per cent devaluation originally planned, it was devalued by up to 500 per cent. Notably, the effect of this unprecedented devaluation included high costs of imported inputs and, consequently, prices of finished products in circumstances of declining real incomes and nominal money stock, and a bloated foreign debt which rose from N41452.4 million in 1986 to N633,144.4 million in 1993 (Osagie 1989, p. 227, CBN Statistical Bulletin 2002, p. 226).
A range of debt management strategies, notably debt buy-back and debt conversion, was adopted by Nigeria between 1988 and 1993 to address the debt question. Debt buyback is a debt reduction strategy of the London Club, under which part of the debt owed to the Club would be converted into a 30-year bond, with a 10-year moratorium on interest payment and the reduction of the rate of interest from 9 per cent to 3 per cent. It also included the option to buy back the debt at a given rate agreed by both parties. Nigeriatoday.com (2000) quotes the Nigerian Senate Committee as eulogising debt buy-back schemes as a veritable instrument of debt reduction and endorsing the debt buy-backs of between 1988 and 1993, which, it asserted, reduced Nigeria's debt by US$5 billion. On the other hand, debt-equity conversion aspires to solve the debt problems of developing countries by converting external debt into domestic debt or equity. Such debt conversion takes two main forms, which the World Bank identifies as:
The exchange of foreign-currency debt for domestic-currency debt and the exchange of foreign-currency debt for local currency that can be used for capital investment or for the purchase of equity shares in domestic companies. In both cases, the foreign investor uses foreign-currency to purchase a country's debt from a foreign creditor (typically, a commercial bank) at a discount. He then negotiates with the agency responsible for managing the conversion scheme in the debtor country, usually the central bank, to exchange the debt for local currency or local debt. (Cited in Falegan 1992, p. 188)
Economic Diplomacy, Economic Reforms and Debt Relief
In 1999 when Nigeria returned to civil rule, the macro-economic contradictions, which characterised the economy and threatened its continued survival, were legion. The economic diplomacy of the civilian government was, in the main, geared towards attracting international attention to rescue Nigeria from the distressing condition of its economic misfortune (Ekekwe 2004, p. 20). In laying its economic policy thrust, the new government under President Olusegun Obasanjo appreciated the depth of the decay and acknowledged that:
… it inherited an economy with the following characteristics: declining capacity utilisation in the real sector, poor performance of major infrastructural facilities, large budget deficit, rising level of unemployment and inflation. In addition, the economy had grave problems of import dependence, reliance on a single commodity (oil), weak industrial base, low level of agricultural production, a weak private sector, high external debt overhang, inefficient public utilities, low quality social services and unacceptable rate of unemployment. (Federal Ministry of Information, Nigeria Returns to Democracy 2000, p. 128)
The lack of success in debt reprieve pleas by the Nigerian Government led to the implementation of adjustment programmes, initially haphazardly, but in a more coordinated manner since 2003. Indeed, Obasanjo's economic diplomacy is predicated on the policy prescriptions of the IMF. Rice (2000) reports that, as G77 Chairman, President Obasanjo ‘ruled out a joint decision by poor countries to suspend debt repayment, saying that it would interfere with aid transfers that some nations depend upon for part of their domestic budgets’. The implication of this was that Obasanjo did not contemplate a radical solution to the debt burden of Nigeria. Indeed, he preached subservience to the wishes of international financial institutions (IFIs) as a strategy for obtaining debt relief. According to Nigeriafirst (2003), in 2002, Nigeria offered to buy back $2 billion worth of its commercial Brady debt in an effort to restructure its unsustainable debt burden and improve relations with the IMF. Shortly before the Paris Club debt relief, Obasanjo announced in different fora that he was committed to using the excess accruals from the oil boom to settle the country's debts.
This subservience manifested itself in the adoption of a fully-fledged IMF adjustment programme in 2003 under the pretence that the country itself developed the adjustment framework, called the National Economic Empowerment and Development Strategy (NEEDS). What could be original about the repackaging of the salient traditional prescriptions of SAP? NEEDS is powered by the neo-liberal theoretical position, which is essentially the bedrock of IMF prescriptions, and encapsulates all the obnoxious provisions of SAP. The key elements in the NEEDS reform include: privatisation of state-owned enterprises; liberalisation of key sectors of the economy; restructuring of the public service; review of government budgeting and taxation laws; governance and institution strengthening; debt management; service delivery; due process and export drive and investment promotion (CBN Briefs 2004–2005, pp. 55–63).
Experience with SAP has demonstrated the ineffectiveness of this theoretical position in positively transforming Third World economies. Amidst popular opposition to the economic reforms, the IMF, through its Managing Director, Mr Rodrigo de Rato, warned that only the genuine, transparent and vigorous pursuit of market-driven reforms in Nigeria could make the IMF put any relief mechanism in place (Vanguard 2004, p. 1).
Turning again to the Paris Club, its announcement on the 29 June 2005 that it was ready to consider a comprehensive debt relief deal for Nigeria was unprecedented. The debt relief package granted to Nigeria totalled US$18 billion, representing approximately 60 per cent of the debt owed to the member countries of the Club. Approximately US$30.85 billion of a total national debt burden of US$35.94 billion was owed to the members of the 19-nation Paris Club (CBN Annual Report 2004, p. 143). According to the debt deal, the country was expected to pay the balance of 40 per cent or US$12 billion, starting with a US$6 billion payment of arrears in September 2005, and the remaining US$6 billion through debt buy-back at market value (Ibe et al. 2005, p. 1). The debt relief was based on the ‘Naples Terms’, which specify the equivalent of a 67 per cent reduction in the face value of a country's debt and are applied to the debts of the world's poorest nations. The UK Chancellor of the Exchequer, Gordon Brown, commented that the debt relief granted to Nigeria, combined with the debt buy-back, would ‘mean there is 100 per cent debt relief for Nigeria possibly over the next six months’ (BBC News World Edition 2005).
The debt relief breakthrough has been attributed to the economic reforms embarked upon by the Obasanjo regime since 2003, and the administration's demonstrated willingness to take advantage of the exceptional revenue accruing to the country from the favourable international price of crude oil, to finance an exit from the country's Paris Club debt obligations (BBC News World Edition 2005). As with SAP, ordinary people were antagonistic to NEEDS reform, whose key elements, particularly the deregulation of the downstream sector of the oil industry and privatisation, were anti-poor and pro-rich. Between 2003, when the reform was officially announced, and 2007, when the tenure of Obasanjo's government terminated, the prices of refined petroleum products were adjusted upwards ten times, raising the price of premium motor spirit (PMS) from 40 to 75 per litre. These incessant increments, which the government claimed was in the spirit of market forces, triggered high inflationary pressures that led to riots, protests and nationwide strikes.
Nigeria exited Paris Club debt peonage on 21 April 2006 after paying the third and final tranche of US$4.519 billion. It had effected the payment of the first tranche of US$6.243 billion in October 2005 and the second, some US$1.331 billion, in December of the same year. According to a report jointly prepared by Nigeria's Debt Management Office (DMO), the Ministry of Finance and the Accountant-General, ‘the money for the repayment of the US$12.2 billion to the Paris Club was sourced from the excess crude Account’ (Economic Confidential 2007). (The excess crude Account is an account kept by government for the payment of extra money over and above projected oil earnings for the fiscal year. Money for the excess crude Account is normally withdrawn from the external reserves.) However, there are billions of dollars illegally stashed away in Western countries by former Nigerian leaders. Although there is no agreement among government agencies about the exact amount siphoned from the state treasury through corruption, anecdotal estimates put it at hundreds of billions of dollars. According to the Nigerian Institute of Management (NIM), Nigerian leaders have, since independence, stolen an estimated US$480 billion from the treasury (Daily Independent 10 November 2006, p. 1). It is noteworthy that none of the funds thought to have been stolen by Nigerian leaders and lodged in developed countries for ‘safe keeping’ were factored into the debt relief deal.
The policy stance of the western countries and IFIs on anti-corruption has been demonstrably incongruent with their actions. The IFIs and the Paris Club were silent on the possible trade-off of illegitimate deposits by former Nigerian leaders in western banks. Earlier attempts by Nigeria to recover these funds were greeted with nonchalance and reluctance. To take one example, despite the existence of billions of dollars of looted money found in Swiss banks, the assistance received from the Swiss Government can, at best, be described as tokenism. Thus apart from deposits traced to the Abacha family, some US$1066.8 million of which has been returned to Nigeria's Federal Ministry of Finance in two instalments in late 2005 and early 2006, no mention has been made of funds linked to other high profile looters of the national treasury (Daily Independent 16 February 2007, pp. 1-A2).
The central concern of the Paris Club was to recover its debt from the Nigerian treasury. If moral issues (that the bulk of the loans that translated into Nigeria's debt was contracted by illegitimate and undemocratic governments; that a major chunk of the loans did not get to Nigeria for the purposes they were contracted; and that Nigeria has paid back the loans several times over) had been considered by the Paris Club, it would have requested its members to take stock of, and declare the extent of looted funds in their countries, with a view to using them to offset Nigeria's debt to the Club. But the Paris Club did not undertake such actions. Rather, it mounted pressure on the country to offset its debt with present earnings.
The Politics Within: Politicising Debt Relief
The Paris Club debt relief was greeted with a combination of applause and cynicism. Obasanjo supporters saw the debt relief package as unprecedented and a major achievement of his administration, notably his personal shuttle diplomacy in search of debt relief which had taken him to the major capitals of the industrialised world. To this group, and Obasanjo himself, the decision of the creditors to wipe out most of Nigeria's debt was a sign of confidence in his government's economic reform programmes and its fight against corruption and mismanagement of the economy (Obasanjo 2005, Ribadu 2005). According to this view, the debt relief package was the single most important ‘democracy dividend’ of the Obasanjo years. It is also a perspective which contends that debt relief has signalled the commencement of the process of reclaiming the politico-economic independence of the country, which was usurped by the multilateral institutions of the IMF and the World Bank following the exacerbation of the country's balance of payment crisis as long ago as the 1980s.
Indeed, since the active intervention of the multilateral institutions in Nigeria's economy in the wake of its debt problems, the country's sovereignty has been compromised, as successive governments could not take any major economic, political and social decisions without referring to these institutions. The erosion of an indebted country's sovereignty is usually demonstrated through the introduction of IMF-sponsored reforms and the insistence of the multilateral institutions that they be implemented religiously, irrespective of whether they frequently conflict with the national interest. According to the Finance Minister who introduced SAP in Nigeria, ‘the question is not whether or not Nigeria wanted to reach agreement with the Fund, but whether it could afford not to do so’ (Ikpeze et al. 2004). An unsustainably indebted country is a caged country.
Therefore, the freedom which debt relief offers is enormous. Nigeria would exploit this newfound independence to chart new economic models capable of unleashing the forces germane to economic growth, and the resources thereby released to fund economic development. The Paris Club sanctimoniously avers that the debt relief represented an important contribution to Nigeria's fight against poverty and quest for economic development.
In contrast, leftwing thinkers dismissed the whole debt relief package as evidence of the continuing rapaciousness of capitalism in its quest to extend its frontiers. They contend that the wording of the press release announcing the debt relief is instructive. The press release had said, inter alia:
the representatives of the Paris Club creditor countries met in Paris on 29 June 2005 and expressed their readiness, consistent with their national laws and regulations, to enter into negotiations with the Nigerian authorities in the months to come on a comprehensive debt treatment … (Club de Paris 2005)
The nature of the debt relief deal, which entailed an immediate payment of US$6 billion in debt arrears and another US$6 billion through debt buy-back, had raised the question as to whether the package represented relief in its original meaning of ‘removal or lightening of something oppressive, painful or distressing’, or a capitalist rip-off. Thus both Aina (2005) and Chinweizu (2005) contend that the debt relief arrangement in question was nothing but imperialist robbery and a scam calculated to expropriate Nigeria's hard earned accumulated reserves in one go. Professor Jeffrey Sachs, Special Adviser to the UN Secretary-General on Millennium Development Goals, called for a total debt write-off for Nigeria and argued that the extraction of US$12 billion from a country with an annual budget of between US$3 and US$4 billion, millions of whose children are dying through hunger and diseases, is callous (Ogolor and Atakpu 2005, Eluemunor 2005, p. B1)
Both arguments have some merit. The optimism of the neoclassical apologists for capitalism hinges on the fact that the money saved from debt service obligations would be channelled, as President Obasanjo said, into education, health care delivery, agriculture and food security and infrastructure such as roads, electricity, water supply and transportation.
Nigeria's debt relief deal, with its inequitable and contradictory apportionment of gains and losses, threw open new vistas of class antagonism and elite solidarity. At the same time, reform created a scenario of dwindling purchasing power for the masses and economic prosperity for the elites. The deregulation component of the reform policy broke the monopoly of the state-owned Nigeria National Petroleum Corporation (NNPC) in the importation of refined petroleum products and bestowed shared access on the elites. As Ochonu (2007) has noted: ‘through politically strategic awards of oil prospecting blocs and contracts for the importation of refined petroleum, [President] Obasanjo has transformed a strategic national ministry into a preeminent organ of personal political power’. With this power, the state, which has remained the single most important source of wealth, took care of the elites by ensuring that the four refineries in Nigeria were inadequately maintained and therefore incapable of producing enough refined products to satisfy domestic demand.
The same pattern of rent seeking is evident in the privatisation of state-owned enterprises (SOEs). The manner of ownership transfer, and the make-up of beneficiaries, of these SOEs led Ochonu (2007) to conclude that the sole legacy of Obasanjo's government was the transfer of national wealth and assets into the hands of a few, well-connected actors in the Nigerian corporate scene. Nowhere was this more glaring than in the formation of a company called Transnational Corporation (Transcorp) through which leading personalities in both the private sector and in government, including President Obasanjo, acquired potentially profitable SOEs. Through Transcorp, oil prospecting blocs and SOEs in the telecommunications and hospitality sectors were appropriated by these elites. This pattern of appropriation was replicated in all the sectors and enterprises privatised. It was in a bid to continue to protect and advance these elite economic interests that a coalition of private sector operators mounted a massive, but ultimately unsuccessful, campaign for the constitution to be changed to allow Obasanjo to contest the presidency for an unprecedented third term.
Meanwhile, the scepticism of the masses over the presumed gains of debt relief is founded in the lack of visible progress in social welfare during the eight years of the Obasanjo presidency. Nigeria signed 28 credits agreements worth a total of US$2.3 billion with the World Bank to fund 24 projects in education, health and poverty reduction. Neither this sum, nor the 15.83 trillion spent by the three tiers of government (federal, state and local), made any discernible impact on the lives of Nigerians, whose socio-economic indicators have remained static and, in some cases, actually regressed (Daily Independent, 26 April 2007 and 1 May 2007, p. 1).
The expectation that Paris Club debt relief would act as a trigger for investment in development is both unrealistic and not founded on a careful reading of recent history. However, it is an expectation rooted, first, in the favourable price of oil on the global market which averaged US$49.99 a barrel in the first half of 2005; and, second, in increased crude oil production which averaged 2.43 million barrels per day or 440.72 million barrels in the first six months of 2005 (CBN Economic Report 2005, p. 18). Nonetheless, Nigeria's extreme dependence on oil income leaves it inordinately susceptible to the vagaries of the world market in crude oil. For example, would the touted savings from the Paris Club debt relief deal be enough to make up for a major fall in the price of oil? In addition, just as importantly, would any of such savings be put directly to the service of socio-economic development in a context of limited capital availability?
There appears to be support for the need to temper the seeming optimism surrounding expectations of the Paris Club debt relief deal with caution. Was debt relief a reward for the strict implementation of the NEEDS reform, as widely portrayed, or was it a hasty damage-limitation exercise in view of the US National Intelligence Council Report of January 2005 (National Intelligence Council 2005), which predicted the disintegration of Nigeria within 15 years? Certainly, the unprecedented volume of debt relief, and the reversal of the age-old insistence, by the IMF, that Nigeria was unworthy of debt relief, confer a fire sale quality to the proceedings. Furthermore, why was debt relief granted at a time when there was a huge build-up in the country's external reserves? In addition, why was this done under conditions of unseemly haste, with the reclassifying of Nigeria as an ‘IDA-only’ country (a prerequisite for debt relief), the signing of an agreement, and the announcement of a completed deal all taking place during the single month of June in 2005? Would it be too cynical to suggest that the Paris Club had used its knowledge of the US National Intelligence Council Report prediction, and insight into the Nigerian leadership's determination to pursue debt relief at all costs, to increase chances of an agreement over the US$18 billion deal?
There is a long tradition of wastefulness, and a penchant for unproductive disbursement, of Nigeria's national wealth. Since the first oil boom in 1973, successive Nigerian leaders have frittered away oil revenue that has accrued to the country. Retd. General Yakubu Gowon, who presided over the first oil boom of the 1970s, is remembered for reportedly claiming that Nigeria's problem was not how to secure foreign trade earnings but how to come up with plans for spending its burgeoning foreign reserves sufficiently quickly. For his part, Ex-President Shehu Shagari had little of lasting value to show for the additional revenue that accrued to the national coffers when he was president, although his rule is associated with the emergence of a particularly rapacious band of parasitic nouveaux riches. During Retd. General Ibrahim Babangida's era as Head of State, the oil windfall of more than US$12 billion earned from increased crude prices caused by the outbreak of the first Gulf War literally disappeared, and has still not been located or recovered. Thus with Nigeria's external reserve hitting an unprecedented US$24.37 billion as at June 2005, it is hardly surprising that the Paris Club would try to recover some of its outstanding debt; it had nothing to lose and all to gain.
The establishment of good governance institutions and anti-corruption bodies has been identified as contributing to the accumulation of the impressive external reserves considered necessary for Paris Club debt forgiveness. Yet, prior to 1999, when the government of President Obasanjo assumed power, anti-corruption institutions had existed. What was lacking was the political will to give credence to them. However, through the Independent Corrupt Practices and other related Offences Commission (ICPC) law of 2000 and the Economic and Financial Crimes Commission (EFCC) law of 2002, the country witnessed the prosecution of high-profile corrupt cases involving the former Inspector General of the Police, Mr Tafa Balogun, former Senate President, Chief Adolphus Wabara, former Minister of Education, Professor Fabian Osuji, and former Governor of Bayelsa State, Mr Diepreye Alamieyeseigha, amongst others.
However, in spite the efforts of the government at curbing corruption, the EFCC avers that ‘political office holders have looted US$100 billion from the public coffers since the advent the fourth republic in 1999’ (Daily Independent 18 September 2006, pp. 1-A2). This is because of the double standards that have characterised pursuit of the war against corruption, and which have led several analysts to conclude that the execution of the war was selective and, in the hands of the presidency, a weapon to bring the opposition into submission. Thus, there have been several high profile cases of corrupt practices and abuse of office, which relevant government agencies have refused to investigate, and cases where investigations have actually taken place but reports of findings have not been made public.
For example, the government has largely ignored the Okigbo Report. The product of investigations into how the Gulf War windfall was spent by the military administration of Retd. General Babangida, the Report seriously indicts the latter. However, Babangida is alleged to have single-handedly sponsored Obasanjo's ascension to the presidency in 1999. Similarly, the government rejected a report from the EFCC indicting President Obasanjo's alter ego, Chief Olabode George, of corrupt practices while serving as chairman of the Nigerian Ports Authority (NPA). Again, the Petroleum Trust Development Fund (PTDF) saga, which pitched President Obasanjo against his deputy, Vice President Atiku Abubakar, exposed the anti-corruption war as an empty façade. Embarrassing as the PTDF scandal was, the indictment of the protagonists by the Senate was merely symbolic, and depicted elite solidarity based on [shared] material interests. The PTDF saga was therefore quintessential intra-elite rivalry for economic ascendancy.
A new dimension was added to the politicisation of Paris Club debt relief by the unsuccessful campaign for the extension of President Obasanjo's term of office. Political and business elites were frontline campaigners for the extension of the tenure of President Obasanjo, contrary to the provisions of Nigeria's constitution. The kernel of their argument was continuity: to enable him to conclude the NEEDS reform he had started, and from which Nigeria had benefited in the shape of debt relief from the Paris Club. Damian Ozurumba, a member of Nigeria's House of Representatives and frontline third term campaigner, argued in an interview that ‘a major bane of the Nigerian project has been the unfortunate practice of new leaders coming up with ostensibly new ideas … jettisoning all on-going policies’, and concluded that Obasanjo should be allowed to continue (Awom 2006, p. B3).
The propelling force for such elite solidarity is self-interest. Some of the campaigners were either beneficiaries of state-dispensed prebends or were well positioned at the commanding heights of Nigeria's economy, and feared that a change of guard, politically, would dislodge them from their privileged position and reverse whatever economic gains they had made. Others perceived the campaign as a veritable vehicle for ascending to the status of unproductive rent-seeking elites. Whatever the motive, the intention was to overturn the Nigerian constitution's stipulation that a president can serve no more than two four-year terms in office, and thereby frustrate ongoing attempts to entrench a democratic culture in the country. The groundswell of opposition against the extension of President Obasanjo's tenure by the masses and civil society organisations undermined his international support base and led to the defeat of the motion by a Senate vote.
Nonetheless, President Obasanjo had expected his third term bid to receive the unalloyed support of both western countries and the international financial institutions (IFIs). His mantra for continuity (consolidation of NEEDS reforms and deepening of the anti-corruption war), as appealing as it was, could not overshadow the disruptive activities of ethnic militants in Niger-delta. As observed by Lubeck et al. (2007, p. 1), Nigeria is a major supplier of petroleum to the American and European markets, and ‘the escalating political crisis in the Delta threatens American energy security …’ It is possible that the threat of increased disruption of oil production in, and shipment from the Niger Delta, and an escalation in the kidnap of foreign oil workers, influenced western policy opinion in its decision to lend its support to popular agitation against an unprecedented third term in office for President Obasanjo. Indeed, higher oil prices would have been inimical to American and European energy security.
Conclusion
It would be overly simplistic to assume that more funds would be available to Nigeria to carry out development projects as a direct result of the Paris Club debt relief. Nigeria's debt burgeoned initially from penalties for a failure to meet its debt service obligations to its creditors. The low price of oil in the international market made it impossible for it to have enough resources to meet all its debt obligations. Therefore, successive governments constantly postponed, or only partly met, the country's debt service obligations. The supposed success of economic reforms is due largely to the persistently favourable price of its major export earner – oil – in the international market in the recent past. However, the current favourable terms of trade for oil cannot be guaranteed indefinitely. A significant fall in the world market price for crude petroleum will inevitably signal serious trouble for the Nigerian economy. That is the fate of all peripheral economies.