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The MaximsNews Paris Correspondent

Mehri Madarshahi 

Available for Media Interviews: MehriMadarshahi@MaximsNews.com 

“Debt relief is justice, not charity”

An Interview with Nigerian President Olusegun Obasanjo 

   Mehri Madarshahi is The MaximsNews Paris Correspondent and a former senior United Nations official.  Please see her bio below. MehriMadarshahi@MaximsNews.com

     The Paris Club of creditor countries has just agreed to the outline of a debt relief package for Nigeria. About $18bn (£10bn) of debt will be written off and Nigeria plans to buy back a chunk of outstanding loans. The country owes the rest of the world $35bn, and the new talks are linked to an agreement between Nigeria and the IMF on debt repayments. Nigeria is the world's seventh-largest oil exporter and Africa's most populous nation, but also one of its poorest.

   UNITED NATIONS - 6 July 2005  / www.MaximsNews.com / I met with President Olusegun Obasanjo of Nigeria during his recent visit to Paris.  

This coincided with the gathering of Finance Ministers of the G-8 countries in London to prepare the proposal for a debt relief scheme in favor of Highly Indebted Poor Countries (HIPC), especially in Africa. 

President Obasanjo who is also the Chairman of African Union and Chairs the Implementation Committee of NEPAD, welcomed the news as an important step which could  go a long way towards helping the beneficiaries to achieve a sustainable external debt position.  

Nevertheless, he expressed regret that Nigeria as the most populous and a poor African country appeared not to be included among the group of countries benefiting from the initiative. 

He referred to a frequently invoked argument that Nigeria as an oil-producing country should and could not qualify for debt cancellation. 

“Granted, Nigeria is an oil-producing country producing some 2 million barrels of oil per day. If, however, the income is divided among 126 million citizens, each would only receive 50 cent a day, precisely the sum we have to pay for our debt services.” 

He continued passionately, “In light of our prevailing economic and social problems, we are facing similar problems as all the HIPC countries. Therefore, we should have a great expectation for a new solution that could emerge from the upcoming G-8 meeting.  The debt issues must be resolved before we are being held responsible for lack of performance in achieving the goals of the 2000 Millennium Declaration”.  

Today’s major economic stumbling block for Africa and Nigeria in particular is the debt burden.  

The country’s external debt has risen to US$35.6 billion, tantamount to one third of the GNP. 

The debt servicing costs to Nigerian people translate into some 50 cents per person per day - this in a country where close to half of the population lives below the poverty line of earning US$1 a day. 

In Obasanjo’s view, this is immoral and unacceptable. 

Nigeria like many other countries of the third world is in dire need of investment in order to attain the Millennium Development Goals established by the UN General Assembly in the year 2000. 

“We need to invest in education, food security, power, transport, environment and all others challenges which we have accepted to undertake, before the deadline of 2015 approaches. So, today the issue is no longer whether the debt burden “should” or “should not” be lifted.  Rather, the issue is the “mechanism” of when and how”. Debt relief should not be considered charity but rather justice”. 

He added thoughtfully, “I guess it will be very difficult to attain the MDG targets if the level of ODA and trade remain at their present marginal levels. We continue to believe that homegrown poverty reduction strategies should lie at the heart of development plans.  At the same time, without more opportunities for trade, low-income countries will not be able to achieve the kind of sustained and rapid growth that could lead to meaningful poverty reduction”. 

President Obasanjo is a great believer in trade and its liberalization.  He stressed that “this could make up and eventually replace the present slack in the shrinking ODA flows”. 

The G-8 summit will be held in the first week of July in the United Kingdom and President Obasanjo will  represent Africa. 

In that regard he noted that “the meeting takes place at a time when increased effort is needed by development partners to secure the commitments made at Monterrey three years ago. This (G-8) meeting marks an important milestone in achieving the MDGs by 2015.  Towards that objective it is essential that the meeting carefully examine what has been achieved, what remains to be done and how each partner can most effectively contribute to that effort”. 

Turning to developments in Nigeria, President Obasanjo recalled,  

“When we took it over, the country was only a country in name and a shadow of itself.  Its infrastructures - from roads to transports, from health care to education, from its employment indicators to its human structures - were nearly in a state of complete breakdown. The Nigerian Airways could not take off due to fuel shortages and were almost bankrupt. The runways were not repaired owing to negligence of the central Government.  Corruption was rampant and a state of chaos was the order of the day”.   

This was the aftermath of the military dictatorship of Gen. Sani Abacha. This was during the time when private citizen Olusegun Obasanjo - chicken farmer, Chairman of the Africa Leadership Forum and former head of state - was imprisoned on trumped-up charges and wasted away for three years, three months and three days.  

After his release, Obasanjo ran for election and was democratically elected in 1999 and re-elected in 2003 for a second term as President of the Federal Republic of Nigeria. 

In his six years in office, he faced formidable political, economic and social challenges. 

Ethnic strife between Muslims and Christians and other groups persisted and threatened the integrity of this multi-ethnic and multi-lingual (with more than 270 languages) country. 

Obasanjo addressed these challenges seriously and deftly. As a first step he began to revamp the economy, severely undermined by corruption and poor macroeconomic management. 

His economic reforms aimed at introducing a painful process of diversification to relieve Nigeria of its almost total dependency on oil, gas and related products. 

The reform of the agricultural sector - largely at the subsistence level and dependent on significant imports – yielded early results, when Nigeria despite its population growth, succeeded in exporting some 500,000 tons of grain to other African countries and attaining self-sufficiency in the production of cassava, vegetable oil, coco and poultry stocks. 

Inflation was reduced to single digit figures and GDP rose 7% annually.  A successful diversification of the economy to date remains elusive, as oil still accounts for 20% of GDP, 95% of foreign exchange earnings and about 65% of revenues of the federal budget. 

Obasanjo’s National Economic Empowerment and Development Strategy programme (NEEDS) shows promising signs of kick-starting the economy.  

“The underpinning thrust of the current government policy to fight poverty is to enable the poor and more vulnerable sections of society to achieve sustainable livelihoods. The approach is to economically empower communities, families and individuals through a sustained, well-coordinated and comprehensive programme of poverty alleviation” President Obasanjo stated. 

“Security concern is another problem. Unstable infrastructure and the unprecedented increase in population coupled with a rapid rate of urbanization have brought about significant settlement issues related to housing, overcrowding, traffic congestion, environmental degradation and inadequate services.

"It is a combination of difficulties we inherited and now have to cope with. Touch- and go-solutions, although applied out of necessity, could hardly address the problems” he added.  

Obasanjo’s Government has taken steps to attract investors given its pool of low-cost labor (with 43%under the age of 20), abundant natural resources and