Letter from Jubilee Nigeria

A letter sent by Nigerian civil society organisations to the UK and other G8 ambassadors on the international debt action day, 18 January 2005.

WHY THE G8 GOVERNMENTS SHOULD SUPPORT DEBT CANCELLATION FOR NIGERIA

We the undersigned members of Jubilee Debt campaign and Civil Society in Nigeria, wish to share our concerns with you as we mark today (January 18, 2005) as a date set aside for global action on the impact of foreign debt on developing countries.

First, we welcome the call for a modern day Marshall plan by Britain for the delivering of full debt relief, trade benefits and financial assistance for the poor countries, which according to Chancellor of Exchequer, Gordon Brown in his keynote speech in Edinburgh will be United Kingdom’s priority during its presidency of the G8 Summit.

We also welcome Prime Minister Tony Blair’s progressive steps in establishing the commission for Africa last year preparatory to his assumption of the chair of the G8 Summit.

Again, we appreciate UK Government proposal for a hundred percent Multilateral Debt Cancellation for the poor countries, a proposal which is currently circulating among the G8 governments.

Details of the draft paper propose, "that eligible countries are HIPC Initiative post-completion point countries and IDA-only countries benefiting from a poverty reduction support credit". In effect, a total of 21 countries would be eligible under UK Government proposal and categorically leaves out Nigeria which also yearns for debt cancellation.

Your Excellency, in an interview you granted THE GUARDIAN published on Sunday, January 16, 2005 you said, "Happily, Nigeria’s sovereign debt ($32 – 34 billion) is not sustainable. We recognize that our Prime Minister said that publicly in Addis Ababa. You can’t sustain and pay the interest of the capital on a sovereign debt that big. We recognize that something has to be done about that debt. At the moment you (Nigeria) are paying a billion dollars a year like what happened in 2003. The debt doesn’t quite cover the interest so, it still rises".

We expect that with the acknowledgement of Nigeria's debt crises, every effort being made by the British government towards cancellation of the debt of the poorest countries must include Nigeria.

You will also recall that under the aegis of the Paris Club, several of Iraq's largest lenders agreed to cancel up to 80% of the outstanding debts owed to them. This was hailed as good news but there remains a stark contrast between G8 quick response to the call of the US government to relieve Iraq’s debt burden while the same relief was not extended to Nigeria. The parallels between Iraq and Nigeria are obvious- both are heavily indebted emerging democracies. In many respects such as life expectancy, the impact of HIV/AIDS and the proportion of its population living in poverty, Nigeria is even a more deserving case than Iraq. While Iraq's life expectancy is 68 years, that of Nigeria is 51 years. While infant mortality in Iraq is 52 out of every 1,000 births that of Nigeria is 110 out of every 1,000 births. Nigeria’s extreme poverty reflects in part the fact that its oil exports earnings per person are roughly one-sixth of Iraq.

Against the backdrop of the recent Tsunami disaster in Asia and parts of Africa, the Paris Club has offered to cancel debts owed by countries worst hit by Tsunami.

While we applaud this move, we also strongly feel that the Paris Club and other creditors should hearken to the voice of the Nigerian Civil Society and the government by ensuring that the gesture being extended to the countries hit by the Tsunami is extended to Nigeria. Our creditors do not need to wait until Tsunami or any other major disaster occurred in Nigeria before rallying round us.

It is sad that over 150,000 people were lost to the Tsunami, we wish to emphasise that Africa, including Nigeria, loses such a staggering number of people on a regular basis as a result of hunger, malnutrition and disease particularly the dreaded HIV/AIDS, a situation that is compounded by the grinding debt burden.

Despite this obvious similar situation, the continuous huge debt servicing have continue to drain budget funds vitally needed to save lives and re-establish economic growth in Nigeria. It is indeed sad, that despite the remarkable recent progress in re-establishing democratic institutions, fighting corruption and other economic crimes as well as reforming the economy, Nigeria is yet to be considered for full debt relief. This year alone, $3 billion has been earmarked for debt service, an amount which far outstrips the budget for Health and Education. Much more, the $32 billion external debt is odious as much of it were dubiously contracted in questionable manner, the principal of which has been paid over three times in debt servicing.

We believe that the debt overhang will undermine Nigeria's attainment of the Millennium Development Goals (MDGs), which she and other UN member states to work towards in halving poverty by 2015.

In fact, at the BBC World Service Trust Conference held in London recently, Gordon Brown put the matter succinctly when he described 2005 as "make or break" year for humanity in the struggle against poverty in the underdeveloped world.

In Brown's reckoning, it is no more unrealistic to ask for the cancellation of debts owed to the rich countries as well as international institutions. "Unless this important step, among others, is taken urgently, the United Nations Millennium Development Goals may be deferred from 2015 to as long as 50 years on the indices".

Said Brown, "if nothing was done, primary education for all will be delivered, not in 2015 but 2030, halving of poverty not in 2015 but 2050; and elimination of avoidable infant deaths not by 2015 but 2065".

In the light of the above, we wish to demand:

1. The unconditional cancellation of Nigeria’s debt.
2. That the resources used to fund this debt cancellation should not be drawn from Official Development Aid (ODA) budgets, but must be in addition to internationally agreed commitment of ODA at 0.7% of Gross National Product. The sale or revaluation of International Monetary Fund (IMF) gold reserves represents a strong and viable (albeit partial) option to secure the additionality of this cancellation.
3. That the UK Government proposals for up to 100% Multilateral Debt Cancellation should be reviewed to accommodate other poor countries outside HIPC and IDA-only countries such as Nigeria.
4. That the Commission for Africa must support the full cancellation of Africa’s debt by fair and transparent means.
5. That the G8 governments should support a global framework to assist Africa countries to recover their Stolen Assets stashed in Western Banks.

We humbly request that these demands should be forwarded to the British Prime Minister, Mr. Tony Blair, The Commission for Africa and other G7 countries as our input into the Commission for Africa document and other G8 meetings.

We also want to use this opportunity to inform you of our plans to hold a (Pre-G8 Summit) Civil Society Forum in Abuja next month and we hope to invite the G8 countries’ Ambassadors to the meeting.

Sincerely yours,

Signed:

Rev. David Ugolor
President,
Africa Network for Environment and
Economic Justice (ANEEJ)

Eze Onyekpere
Executive Director,
Social-Economic Right initiative (SERI)

Otive Igbuzor
Director,
ActionAid Nigeria

Cecil Nantey
Country Programme manager,
Oxfam G8 Nigeria

Abiola Akinyede-Afolabi
Executive Director,
Women Advocacy Research and
Documentation Centre (WARDC)

Mimido Achakpa
Executive Director,
Women Right to Education programme

This letter was copied to other G8 ambassadors and the Nigerian Minister of Finance.