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Nigeria Missing In U.S., U.K. 18-Nation Debt Pardon List From Mathias Okwe, Abuja
NIGERIA was conspicuously missing from the list of 18 nations, mostly African, released yesterday as beneficiaries of a $16.7 billion reprieve granted by the United States and Britain.
A Finance Ministry source, however, told The Guardian last night that the omission was because Nigeria's case is not being considered with those of countries regarded as heavily indebted, but under a special arrangement called Evian for middle income nations.
The list of beneficiaries was released about the time President Olusegun Obasanjo was addressing a forum of the International Labour Organisation (ILO) in Geneva, Switzerland, on the imperative of a total debt pardon for Africa. President Obasanjo was in London this week for talks with Blair.
The beneficiaries are Benin, Bolivia, Burkina Faso, Ethiopia, Ghana, Guyana, Honduras and Madagascar. The rest are Mali, Mauritania, Mozambique, Nicaragua, Niger, Rwanda, Senegal, Tanzania, Uganda and Zambia.
Nigeria's total external debt is put at $36 billion, although the actual loan was $17 billion and it has paid about $35 billion to the creditors, most of who are in the Paris Cub.
The Finance Ministry yesterday explained that Nigeria was not considered under the Heavily Indebted Poor Countries HIPC but in the Evian Debt Relief Approach.
He said: "Nigeria is seeking debt relief under the Evian approach. Evian is a county in Spain where it was defined that countries like Nigeria which do not fall under the HIPC category will have their cases treated on a case- by-case basis, depending on the peculiar circumstances in their countries."
The source continued: "The fact that Nigeria and some countries were not mentioned does not mean that our efforts have not yielded results. We have not given up. At the appropriate time, our case will receive favourable attention. We are confident on that."
British officials yesterday expressed confidence that the financial ministers of the Group of Eight (G-8) would reach a historic deal at their meeting in London this weekend -- although some differences remain among the eight major industrialised nations.
With the G8 summit in Gleneagles, Scotland, just a month away, finance ministers meeting in London yesterday and today were trying to find common ground.
In addition to the United States and Britain, the G8 nations include France, Germany, Italy, Canada, Japan and Russia.
UK Prime Minister Tony Blair -- current G8 president -- has demanded that poor countries' debts be cancelled and their aid doubled. He and U.S. President George W. Bush agreed during the week in Washington that help on debt should be given only to countries ready to tackle corruption.
Recently, the Nigerian National Assembly signalled the readiness to repudiate the debts, most of which are questionable. President Obasanjo has, however, called for patience to further convince the creditors, many of who argue that the country is neither poor nor deserving of any pardon. The government has countered that in Nigeria's yearly budget, more allocations are made for debt servicing than healthcare and education.
The New York Times yesterday reported the accord between the U.S. and Britain.
The number of countries to be helped is a sticking point. Blair's spokesman said earlier this week that about 25 countries would benefit, while charities say 62 countries need urgent debt relief.
France, Germany and Japan have their own proposal that would mean debt relief for only five countries.
The New York Times yesterday quoted a senior official as saying that U.S. Treasury Secretary John Snow and his British counterpart, Chancellor of the Exchequer Gordon Brown, would present their proposal to a meeting of the finance ministers of seven of the G8 nations yesterday in London.
The debts would be written off by the lenders in an effort to allow the debtor countries to start fresh, get their books in order and eventually be able to borrow again for economic development, health, education and social programs, rather than simply to repay existing loans.
Bush had signalled his willingness to go along with writing off the debts in principle, but the United States and Britain had very different approaches to how such a plan would work, the newspaper said.
Britain wanted the rich nations to take over responsibility for repaying the debts. But Washington wants the loans to be written off entirely by the lenders, the Times said.
In the end, said the paper, Britain agreed to the U.S. approach with a promise from Washington to provide additional money to the lenders to make up for the assets they were writing off.
Sub-Saharan Africa has $230 billion in external debt and pays $12 billion a year on servicing the loans, according to the most recent figures from the World Bank, Reuters reported.
A third of the debt is owed multilateral lenders like the International Monetary Fund. Britain has said that without 100 percent multilateral debt relief, the poorest countries would pay up to $27.5 billion in principal and interest payments to international organisations between now and 2015.
"President Bush and Prime Minister Blair made great progress and Gordon Brown and John Snow agreed on an excellent proposal for debt cancellation for many of the poorest countries," Jamie Drummond of DATA, a lobbying group founded by rock star Bono, told The New York Times.
Bono joined European Commission President Jose Manuel Barroso Thursday in an appeal to government leaders to double development aid to Africa and other poor regions over the next 10 years.
"It is no substitute for an overall plan on aid and trade at the G8 summit, but this degree of co-operation should make a historic breakthrough more likely," Drummond said.
All of the countries eligible for debt relief have had to show that they have acted to improve governing, reduce corruption and pursue what the international lenders consider sound economic policies.
Bush has pledged to channel more aid to developing nations that show they are working to establish stable, democratic governments with good economic policies, The New York Times said.
It added that on Monday, Bush is scheduled to meet at the White House with the presidents of five African countries that held elections last year.
They are Presidents Festus Mogae of Botswana, John Kufour of Ghana, Armando Guebuza of Mozambique, Hifikepunye Pohamba of Namibia and Mamadou Tandja of Niger.
British finance minister Brown was upbeat ahead of the weekend G8 meeting and said in an interview with The Guardian newspaper yesterday that there would be no scaling back of Britain's ambitious plans.
"There is a shared understanding that a resolution on the crushing burden of debt is urgent, and that at the Gleneagles summit we will reach agreement that action together on aid, trade and debt relief is essential," he was quoted as saying.
"I'm still aiming for 100 percent debt relief. I'm still aiming for a doubling of aid. I'm still aiming for trade justice. I'm still aiming for all these issues."
But others were less optimistic. A German government official said in Berlin on Thursday he did not expect a final decision on debt relief at the weekend. A Canadian official said much the same in Ottawa on Wednesday.
Meanwhile, Washington has rejected Brown's other big idea -- an International Finance Facility (IFF) -- which could raise an extra $50 billion in aid money up front by issuing bonds using future development budgets as collateral, according to a report by Reuters.
However, Britain is determined to launch at least a pilot IFF to fund vaccinations, even without U.S. support.
Aid agencies said they hoped that getting a deal on debt relief out of the way at this weekend's meeting might keep the door open for negotiations on increasing aid at Gleneagles.
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