Solving the Third World Debt Problem

Edwards Finance > Debt Help

Q. How to solve Nigeria's foreign debt problem?

A. _Personally, I think Mr Willimas is making a great mistake by saying that we should lengthen the time of the debt. This I believe would increase the total amount owed. What I believe should happen, is that we should shorten the length of debt, and then service the debt with oil, rather than funds. We should approach OPEC, and table our case. This is a big disgrace. Mr Rilwanu Lukman should, as the chairman of OPEC, explain why Nigeria needs to drill extra oil to pay of some of it's debt. We have rescheduled this debt for a long time, and because of the instability in government, it is not a viable option for the country. We need drastic measures, we have oil, we have our quota, all we need to do, is state a case that we need more oil, so as to pay off the debt. Of course, we have to present a solid case, for other countries might state the same problem, but then we have the HR to pull this through. -THE Founding President of the Institute of Chartered Accountants of Nigeria (ICAN), Mr. Akintola Williams has suggested the implementation of a phased rescheduling of Nigeria's foreign debt as against total cancellation. Speaking during a recent visit of members of ICAN to the Chartered Institute of Taxation of Nigeria (CITN), he said: "Nigeria should be pleading for debt forgiveness for poor countries like Togo", Mali and Burkina Faso, adding that, "with Nigeria's enormous resources, there is no difficulty in settling her debts." He said, "What Nigeria needs is for these debts to be spread over a period of years while the interest rate is properly looked into." According to him, only about 4 per cent of Nigeria's debt was owed to America, and as such rather than seek debt cancellation, the country should rather consider a debt rescheduling policy. Commenting on the anti-corruption bid of the present administration, he noted that the last 8 months in the year had witnessed greater stability of the economy judging by the fall in the rate of inflation over the period. He added that one of the things that has prevented large-scale foreign investment into the economy was " a high degree of corruption," stressing that the government must have to create an enabling investment climate for business to thrive in the economy. In order to stem the rising wave of crime in the country, he suggested as a policy thrust in the 2001 budget, employment generation especially in the areas of agricultural development. ICAN he said as well as the Chartered Institute of Taxation is to jointly explore every avenue for better cooperation between the two professions, adding that such an association would go a long way to eradicating cases of corrupt practices usually associated with tax gatherers and accountants alike. "We all know that in every profession there will always be the black sheep, and no profession is clean as to have 100 percent innocent members", he noted. He disclosed that an association of past presidents of both ICAN and CITN was soon to meet to deliberate on key industry subjects especially, the issue of specialization on income tax regime. -The very first step in tackling any debt issue is to determine: 1. Exactly how much is owed, and 2. Who took what loans for what purpose? Is Nigeria's foreign debt $32 billion or $35 billion? If you are scratching your head, then we have a problem here. To get a handle on this, ALL creditors to the Nigerian Government should be requested in a PUBLIC NOTICE to forward their claims before a certain deadline. After that deadline, no claim should be entertained as "valid." After this step, then find out who took the loan on behalf of the Nigerian people and for what purpose. Fact is, many of the private commercial creditors, who hold about 40 percent of Nigeria's foreign debt, were ACCOMPLICES in defrauding the people, in which case that portion of debt may not be "legitimate." A fact-finding "Debt Commission" can accomplish this task in 3 months. And while it is at work, all debt servicing or repayments should be placed ON HOLD. Let's get off our bum and start doing something instead of just talking.

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