Nigeria's former president, Chief Olusegun Obasanjo, has explained how he secured debt forgiveness for the country from the time he took power as elected president in 1999 to the time he left office in 2007.
Obasanjo lamented the country’s budget deficit, poor leadership and corruption, saying it is not impossible to get debt forgiveness from global financial institutions, but leaders must chart a fair course. He explained.
Mr. Obasanjo said global financial institutions must convince those seeking such forgiveness that their demands are genuine to earnestly challenge the deal to take it in a developmental direction. revealed.
In an interview with News Central TV published on Friday, Obasanjo successfully secured debt forgiveness for the country by demonstrating readiness to utilize the funds saved from sustainable development considerations. He said he could.
The former president argued that recent leaders rarely take such a just approach when considering debt forgiveness, citing corruption and lack of planning.
When Mr. Obasanjo took office as Democratic President in 1999, Nigeria had repaid a huge debt of $3.5 billion, with a total debt burden of about $36 billion, while the balance of foreign exchange reserves was about He said it was $3.7 billion.
He said securing the bailout allowed it to clear its debts, leaving it with $45 billion in reserves and $25 billion in its oil surplus account.
“When I was elected president of Nigeria, one of the things I was worried about and wanted to do something about was debt forgiveness. The amount of debt we carried, the burden was too heavy. . We were spending $3.5 billion on debt servicing, and that amount wasn’t going down, so I thought we needed to seek debt relief.
“Many people in Nigeria and abroad thought this was a bad dream, but I was convinced of it. I went to the World Bank and started talking to the creditors,” Obasanjo said. he said.
He explained that in his move he discovered why the world’s financial institutions “don’t feel like they owe us” and that “when they advocate for what they call reform… We will take this into consideration if we determine that they have demonstrated this sincerely and are attempting to do so.” , and the reforms they ask of us are the ones we should ordinarily implement.
“How do we deliver public services? How do we significantly reduce corruption? How do we manage public finances? And these are all reforms that no one needs to tell us.”
Obasanjo said that if the world’s financiers believe that “you are doing what is expected of them, they will listen. And the world is more sympathetic than you think.” You might even realize that.” The world has no obligation to you unless you show responsibility. ”
“When I took over, I discovered that we were spending more than $3.5 billion in debt repayments. That’s a lot of money, but the problem was because that money was being spent together on interest payments,” he said. “The problem was that the amount of debt had not decreased.” And to pay the so-called fine. This is because (in case of) default, you will have to pay a penalty and will not be able to give you a good direction for your debt. ”
Citing an example of a state that squandered the loan obtained for a carpet production project without transferring it to the site, Mr. Obasanjo responded to a query by saying, “Once you sign, there is no question of how the money is spent.” “I was shown a small print.” Responsibility of lender, responsibility of borrower. ”
“Given all these things, I was confident that I could mount a credible and serious case. And of course, on the other hand, they believe that I will continue the irresponsibility of the past, a corrupt society.” They wanted me to do the right thing that I shouldn’t have done in the past.
“The important thing is that the international community knows us better than we know ourselves, and sometimes we keep our heads down like ostriches in the sand. They know what you are doing. ” he said.
The former President said the establishment of the Independent Corruption and Other Related Offenses Commission and the Economic and Financial Crimes Commission was born out of a move to meet the policy of securing debt forgiveness, demonstrating readiness to eliminate the stench of corruption. It was said that this was done as part of reforms to Corruption and mismanagement.
“Of course, you will remember that one of the first bills I sent to the National Assembly was the ICPC Bill to fight corruption. I then introduced the EFCC Bill to fight corruption. Because the international community knows what you guys are doing.
“So, convinced of the fact that we cannot sustain the amount we are spending on debt repayments while the debt does not come down, heavy penalties were imposed for each default. It took us almost six years to convince our development partners/creditors to get there, but in the end they were happy.
“I assured them that the money saved by debt cancellation would be spent on the Sustainable Development Goals, and that has been done.
“The world doesn’t owe you anything, but you have a lot to gain from the world if you do the right thing,” the former president explained.
Obasanjo lamented the situation where “leaders are managing the economy and prosperity for themselves instead of managing it for the benefit of the whole people” and said, “Where there is no development, we are actually inviting problems. It will happen,” he said.
He explained: “When I came in 1999, we had $3.7 billion in reserves and, as I said, we were spending $3.5 billion on debt service. That’s all. When I came in, we had $3.6 billion in reserves. I was nearly $3.6 billion in debt, but by the time I retired eight years later, I had discharged the debt and liquidated what I had to pay, and the amount of debt I was left with was about $3.5 billion/$3.6 billion. dollar.
“At the same time, our reserves went from $3.7 billion to $45 billion, and at the same time we created what we call excess oil, the excess amount between the budget for which we were willing to sell crude oil and the amount we actually sold it for.” .
“Typically, we’re conservative in our budgeting and we had about $25 billion (in the oil surplus account). If you add that to reserves, it’s about $70 billion.”
But he added: “The important thing is that I quit in 2007. Between 2007 and 2024, all that money disappeared. All the money is gone and today we own more than we owed when we came to government in 1999. Why? Poor leadership, poor economic management, rampant corruption. , rampant corruption.
Regarding the attitude of the country’s past leaders, Obasanjo bemoaned the characteristics, calling them “sickening” and accusing them of “lack of leadership.”
“As I always say, leadership is not something you choose, and not everyone is given it. Once you recognize leadership, you need to value it and use it to your advantage. there is…
“Especially in Nigeria, the important thing is to take two steps forward, one step to the side and two or three steps back, but that doesn’t get you very far.
“Leadership is something we should look at. What do you think of the president of Nigeria who came into office without a plan? And he woke up and said just three plans. Are you trying to achieve that and who are the people involved in it? You just came and just opened your mouth and declared something that has not been studied,” Obasanjo said.
