Written by •Dr.Ola Balogun
The myth of IMF competence rating
Ministers in their native countries, based on the premise of the supposed competence that the western-anointed ‘experts’ are deemed to have manifested in the various World Bank and IMF positions to which they are regularly appointed by the powers that be in the western world.
However, it is highly debatable if an individual can be said to be the most suitable candidate for appointment to the position of Finance Minister of an African country primarily on the basis of prior official functions in the IMF or World Bank. It is in fact highly instructive to note that the Western nations themselves do not generally recruit their own Finance Ministers from the ranks of World Bank and IMF officials, even though they often lean heavily on Third World Governments to appoint such ‘experts’ to serve as Finance Ministers. Could there be more to it all than meets the eye?
Coming now to the issue of whether or not Nigeria actually owed any money at the time that Dr. Ngozi Okonjo-Iweala is held to have performed the ‘great feat’ of reimbursing the whopping sum of $12 billion (twelve billion dollars) to western creditor nations, it is important to first answer a number of crucial questions. These are:
– How and when were these alleged debts incurred?
-In the case of Nigeria, how much wasallegedly borrowed, and how much has so farbeen paid back to the supposed creditors?
-Are these alleged debts legitimate debts, and are they truly enforceable?
– What are the true roles of the I.M.F and the World Bank in the debt collection scenario?
To come to a proper understanding of the current Third World debt situation, it is important to recall that the entire situation has its roots in the immediate aftermath of the successful move by OPEC countries in the 1970’s to increase the price at which oil was being sold on the world market. It was the first time in modern history that suppliers of a raw commodity had succeeded in joining forces to oblige the industrialised countries to pay a fair price for raw products.
The western countries, however, eventually had the last laugh, since the ensuing increase in income for the oil producing countries (known as petrodollars), ended up being deposited in the western banks.
With so much cash available in the banking system, representatives of major western banks like Chase Manhattan, Bank of America, Barclay’s etc. fanned out all over the world, cajoling the governments and leaders of Third World countries to contract loans for development projects, on the premise that these loans were being offered at extremely low interest rates. The bait at the time consisted in holding out the hope to Third World countries that the successful execution of these so-called ‘development projects’ (which were also concocted by ‘experts’ dispatched from the western countries) would enable the Third World countries to achieve the same level of well-being and development as was then prevalent in the western world.
Any questions arise from the circumstances in which the original loans allegedly owed to the western nations were offered and accepted by the Nigerian leaders who contracted such loans in the past. First of all: Was there not some element of deception involved in providing loans at supposedly low interest rates, only for these interest rates to be jacked up unilaterally by the lenders in subsequent years without any possibility of recourse on the side of the borrowers
Secondly, were these loans legitimately incurred, given the fact that most of the governments that incurred the loans were not elected governments that truly represented the people of Nigeria? In this connection, it is pertinent to recall the well-known international principle of odious debts, formulated by Alexander Nahum Sack, a former Minister of the pre-revolutionary Russian government who subsequently became a Professor of International Law in Paris.
Sack pointed out in very simple terms:“If a despotic power incurs a debt not for the needsor in the interest of the State…, this debt is odious for the population of all the Sate. This debt is not an obligation for the nation;it is a regime’s debt, a personal debt of thepower that has incurred it, consequently it fallswith the fall of this power.”
For greater clarity, Professor Sack added: “The reason that these ‘odious’debts cannot be considered to encumber the territory of theState is that such debts do not fulfil one of the conditions that determine the legality of thedebts of the State, that is : the debts of the Statemust be incurred and the funds from it employedfor the needs and in the interests of the State.”
For any fair-minded person, most of the debts alleged owed by the people of Nigeria cannot be said to be legitimate debts for four crucial reasons.
The first is that the vast majority of these debts were incurred by corrupt and unelected military regimes whose power to enter into valid contractual agreements on behalf of the peoples of Nigeria is wholly questionable.
The second reason for the illegitimate nature
•Probing the vexed issue of Nigeria’s external debts
Drastic reductions in government expenditure, leading to dramatic cuts in health care services, education, and other social spending. Under the dictates of SAP, there have also been wholesale privatization of state-owned enterprises under the pretext of making them run more efficiently, leading to widespread job losses, and enabling corrupt leaders and their front men and cronies to pocket key state-owned entities at give-away prices. In this respect, the shocking revelations that have emerged from the on-going Senate probe into privatisation merely represent the tip of the iceberg!
It is obvious that SAP strategies dictated by the IMF and the World Bank have been enthusiastically embraced by successive Nigerian Governments, beginning with the regime of Gen. Ibrahim Babangida, for purely selfish and self-serving motives.
Another direct consequence of the IMF-inspired SAP strategies is that our currency has been severely devalued and rendered virtually worthless in relationship to the currencies of the major western countries, a situation that has been welcomed with glee by Nigeria’s ruling elite, which has thereby been enabled to run vast scams based on speculating against the naira through the multiple new banks they have set up specifically for this purpose.
This is why a small handful of Nigerians continue to grow tremendously richer by the day, while the vast majority of the citizens of this country are groaning under the burden of the hardships imposed by the debt collection strategies of the IMF and the World Bank. In the circumstances, it is hardly surprising that the local beneficiaries of the fraudulent debt claims of the western nations continue to hail the IMF and the World Bank and to insist that we should go periodically to beg the fraudulent cartel of insatiable debt collectors known as the Paris Club for so-called “debt forgiveness”. We also need to consider the fact that over and beyond the issue of the Third World debt, other questions also need to be raised.
First of all, it is a well-known fact that the current prosperity of the key western nations is built on the free slave labour that was forcibly provided for several centuries by millions of slaves who were carried away from the African continent to toil for free in America and the West Indies. No reparation or compensation has ever been paid to Africa by the beneficiaries of the horrors of the slave trade, which devastated the African continent, while building up the New World economies for the direct benefit of the European powers. Even more to the point, the same Western powers colonised and exploited Africa for over a century during the colonial era.
Have these nations ever paid one kobo for all the raw materials they extracted for free from the African continent during the period of colo-nial occupation of the continent? Have they ever paid for the forced labour to which they subjected the colonized peoples while they were in control of our countries?
It is interesting to note in this connection that as recently as in 1945, Germany and Japan were forced to begin paying reparations to nationals of countries who were deemed to have been forced to work in German and Japanese labour camps during the Second World War. In fact, reparations are still being paid to the supposed Jewish victims of Nazi war crimes to this very day!
Why then are the peoples of Africa not entitled to some form of reparation and payment for all the exploitation to which they were subjected by the colonialists?
After all, colonialism was only officially brought to an end after 1960! Are Africans not human beings too, and were they not placed in labour camps and forced to labour for free at gunpoint by the colonizing powers? In the light of the above considerations, it should be obvious to any fair-minded person that the claim that Nigeria owes the western countries any money is pure fiction. The truth is that it is THEY who owe us money! They owe us money as reparation for the damages inflicted on us by several centuries of slave trade. They also owe us money for all the raw materials they illegally exported from our country during the colonial era. (For instance, the Shell petroleum company is widely believed to have been exporting oil from Nigeria for several years before we even got to know that such a commodity existed!)
In the light of the forgoing explanations, it is obvious that we owe NOTHING, and we should have paid NOTHING!
Viewed from this perspective, Dr. Ngozi Okonjo-Iweala’s much touted “achievement” in paying off alleged foreign debts said to be owed by Nigeria was far from being in Nigeria’s true interests. Even if it were to be accepted (contrary to what has been demonstrated above) that we were actually owing money to the western countries, was it justified to make a bulk reimbursement of such magnitude at a time when our country lacked sorely needed funds for such crucial needs as health care, education, infrastructure development etc? Why have other debtor nations not followed in Nigeria’s footsteps? It has often been argued by the proponents of the Ngozi Okonjo-Iweala/Olusegun Obasanjo ill-advised and injudicious rush to pay money back in bulk to the Paris club group of predator nations that failure to do so would have resulted in dire consequences for Nigeria.
This point of view however flies in the face of the easily verifiable fact that the heavens did not fall when countries like Argentina and Brazil insisted that they were incapable of keeping up with the scheduled repayment of IMF/World Bank loans in the early years of the present century. All that happened was that the debts were renegotiated and rolled over. Why would Nigeria have been in a weaker position than the major Latin American nations to renegotiate its schedule of payments?
Unfortunately for the admirers of Dr. Ngozi Okonjo-Iweala, there is little reason to believe that she actually achieved anything useful during her tenure of office as Finance Minister under General Olusegun Obasanjo. This being the case, has President Goodluck Jonathan not already doomed his nascent administration to early failure by recruiting an IMF anointed “expert” to occupy a key position in his cabinet?
Time will soon tell!
•Dr.Ola Balogun, film maker and musician,lives in Lagos