Nigeria’s “Debt Cancellation” – a Big Scam!

Recently Nigeria paid a sum of $12billion to the Paris Club, thus cancelling its foreign debt. The fact that through the servicing of the debt, Nigeria had already paid back more than it has borrowed is conveniently skipped over. Those $12bn could have been used to improve the miserable lives of most Nigerians.

Recently the Obasanjo regime in Nigeria achieved something that only a few years ago would have seemed unthinkable: it paid off the foreign debt it had to the Paris Club. Thus $12billion dollars were paid in one instalment.

This was presented as a major victory for Obasanjo. Here we publish a brief comment that appeared in the recent edition of the Nigerian Marxist journal, the Workers’ Alternative. As the article points out, Nigeria has paid many billions of dollars in servicing its foreign debt, and in reality has paid back far more than it had ever borrowed.

The $12billion could have been used to improve the lives of ordinary Nigerians, instead it has gone to line the pockets of the imperialist bankers. This money was taken away from hungry Nigerian children, from pensioners who have not seen their pensions paid for months, from students who have seen their fees increased several times over. It is a direct transfer of wealth from the poor to the rich.

What is even more shocking is the fact that the money Nigeria has just coughed up is spent by US imperialism in just two months to finance its dirty war of plunder in Iraq.

Obasanjo’s attempt to change the Nigerian Constitution in order to guarantee himself a Third Term in office was rejected by the National Assembly. Some commentators have suggested that the payment of the $12billion was a way of Obasanjo strengthening his bid for a Third Term. A recent development may indicate that this was the case. Having just paid off the $12billion, the Nigerian Federal Government has just negotiated a new loan from China of $2.5billion. It also has plans for further bilateral loans of $3billion in 2006, $1.5billion in 2007 and $2billion in 2008. This is a total of $9billion dollars, on which new service charges will be imposed, thus laying a new debt burden on the Nigerian masses.

The Nigerian ruling elite is the loyal servant of imperialism. It has no interest in genuinely improving the lot of the Nigerian masses. All it is interested in is lining its own pockets.


It is not surprising why there were no mass jubilations on the streets when the news of the total cancellation of Nigerian’s debt to the Paris club filtered out. While the ruling elites, petty bourgeois intellectuals, cronies of the regime, etc, were busy singing praises, the mass majority of the people don’t really understand why all the noise.

As the news filtered out, the news of the non-payment of pensioners and the agonies they were facing shared the front pages, along with other stories of woe from the Niger-Delta, students’ fighting imposition of school fees in LASU, etc.

What is very clear is that nobody really believes that now that debts to the Paris club are ‘gone’ that the government would now spend money on improving the lives of the people. What ‘Baba’ [Obasanjo] thought would add more force to his third term agenda has not provoked celebrations of the street of Nigeria.

False and Cheap Propaganda

“Twelve billion dollars in Nigeria would have gone a long way towards saving children, immunization, healthcare, all kinds of things. But the donors (Paris Club) got greedy. They said, ‘Take the oil revenue … and instead of investing it in your needs, give it to us’.” These were the words of Professor Jeffrey Sachs a bourgeois economist.

It is very clear that the payment of over $12 billion to the Paris club within a period of six months is a major plunder. It is a major looting of the treasury. Presenting this as a gain tells us a lot about the morals of the ruling elites; they pass off poison as a lovely drink. $12 billion could definitely change the face of Nigeria, if spent wisely instead of blowing it on dubious debts.

Big time scam and plunder

The so-called foreign debts were totally fictitious and fraudulent. Obasanjo himself had acknowledged this several times over the years. Why would paying off a dubious debt be a democratic dividend? Secondly, the so-called debt had been paid up multiple fold.

The current pay off again confirms the real nature of things: that the imperialists are in firm control of the economy through their local collaborators in Government. This regime is a regime of the IMF. Everything it does is towards meeting up with the obligations of the IMF, towards satisfying the debt obligations.

For the past seven years, the Nigerian government has paid about $25 billion to foreign banks simply toward servicing the debt!

Meanwhile it finds it very difficult to pay pensioners their legitimate pensions and gratuity.All the various draconian policies were geared towards making it possible for the wealth of the country to be plundered.

Now that the debt is ‘gone’

The attitude of the mass majority towards the so-called debt cancellation is quite critical. It is a form of wait and see attitude. However, instinctively they do not believe a word coming from the mouths of the ruling elites.

Now that the treasury has been plundered to satisfy greedy and dubious foreign bankers are the wages of workers going to be increased, will promotions now be regular, will education and health now be available and free, will pensioners now smile, will the roads get repaired and better ones contracted, will unemployment disappear? The list is endless. Will things change for the better in Nigeria and will there not be new debts?

What is very clear is that those who will continue to smile are the same people who were responsible for the debt and looting of the various treasuries. The current debt rip off is very profitable to the foreign banks and their local collaborators. The ‘consultant’ also got fat pay cheques. It is only a matter of time before the massive corruption that surrounds this inhuman deal gets exposed. The only people who lost in this deal are the Nigerian masses.