Former President Olusegun Obasanjo has outlined the steps he took to secure substantial debt relief for Nigeria during his tenure from 1999 to 2007.
He noted that the creation of the Independent Corrupt Practices & Other Related Offences Commission, ICPC, and the Economic and Financial Crimes Commission, EFCC, were part of his policy moves that convinced Nigeria’s creditors to write off debts.
Obasanjo highlighted the challenges he faced upon assuming office, including Nigeria’s debt servicing burden of $3.5 billion annually and a total debt of approximately $36 billion, while the nation’s reserves stood at a modest $3.7 billion.
Obasanjo revealed that he successfully negotiated debt forgiveness by convincing international lenders of his administration’s commitment to channeling the funds saved into developmental projects aimed at sustainable growth.
He emphasised that presenting a credible and transparent plan was key, as global financial institutions required assurances that forgiven debt would foster positive development outcomes.
Reflecting on the current state of leadership in Nigeria, Obasanjo expressed concerns about a perceived decline in ethical leadership and effective planning.
He stressed that without a genuine development-oriented approach, requests for debt forgiveness are unlikely to gain international approval.
“When I became elected President of Nigeria, one of the things that worried me and that I wanted to do something about was debt relief. The quantum of debt that we were carrying, the burden was too heavy. We were spending $3.5bn to service debt, yet the quantum was not going down and I believed that we should seek debt relief.
“Many people inside and outside Nigeria thought it was a bad dream but I was convinced. I went to the World Bank and I started talking to our creditors,” Obasanjo said.
He explained that in his moves he found why the world lenders “did not feel that they owe us”, disclosing that they give consideration “when you make your case if they find that you are genuinely showing and trying to carry out what they call reforms, and the reforms they are asking us to carry out are reforms we should ordinarily carry out.
“How do you have public service delivered, how do you drastically reduce corruption, how do you manage your finances? And all these are reforms that nobody needs to tell us to do.”
Obasanjo noted that international lenders are more willing to engage with nations demonstrating accountability, stating, “when the world lenders believe that you’re doing what they expect of you, they will listen and you may even find the world more sympathetic than you thought. The world does not feel it owes you anything but if you show responsibility.”
He said, “I took over and I found they were using over $3.5b to service debt, that’s a lot of money but the problem was that the quantum of debt was not going down because that amount of money was being spent together to pay interests and to pay what they call penalties, because (for) any default you pay penalties and you can’t show good course for the debt.”
Illustrating the misuse of loans, he referenced a state project where a loan intended for carpet production was fully spent without any work being done on-site. He was told, “a small print which says once you sign, how the money is spent is not the responsibility of the lender, it’s the responsibility of the borrower.”
“With all these, I was convinced that I could make a credible case, a serious case, and then of course on the other hand they wanted me to do what’s right that I should not continue with the irresponsibility of the past, the corruption of the past.
“The point is that the international community know us more than we know ourselves and at times we bow our heads like ostrich in the sand. They know what you do,” he said.
The former president said the creation of the Independent Corrupt Practices & Other Related Offences Commission and the Economic and Financial Crimes Commission was borne out of the move to satisfy the course to secure debt forgiveness, as part of reforms to prove readiness to eliminate the stench of corruption and mismanagement.
“Of course, if you remember one of the first bills that I sent to the National Assembly was the ICPC bill to fight corruption. I followed that up later with the EFCC bill, again to fight corruption because the international community knows what you’re doing.
“So, convinced of the fact that we could not sustain the amount of money we were spending to service debt with the quantum of debt not going down, anytime we defaulted they gave us heavy penalties, and my determination to do what would convince Nigerians internally and convince our development partners/creditors, then it took almost six years before we got there and at the end of the day, they were satisfied.
“I even gave them assurance that the money saved from our debt relief would be spent on the sustainable development goals and that was been done.
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