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Debts: Road to second slavery – Part 2


The conditionality channel was in fact most influential.

It was the anticipation of possible debt cancellation that broke the political deadlock that had prevented policy reforms for a long time. 

Mrs. Ngozi Okonjo-Iweala got lots of plaudits from this brilliant move that saved Nigeria the much sought after $18 billion debt relief. 


Although this writer then forcefully opposed the decision of Nigeria to pay off that huge chunk of foreign reserves to service the then $30 billion credits which was reduced to just $12 billion, the decision earned the government praises for at least saving the face of Nigeria and pulling us away from the enslavement of being a debtor.

Few years down the line, the current government has literally gone back to accumulate heavy debts.

By its own mouth, government of Muhammadu Buhari told us that Nigeria’s external debt commitment rose by $11.77 billion in the last three years. 

According to debt statistics obtained by the media from the Debt Management Office, the country’s external debt rose from $10.32 billion in June 30, 2015 to $22.08 billion as of June 30 this year.

This means that the country’s external debt commitment has grown by 114.05 per cent in the last three years.

Although multilateral debt made up $10.88 billion or 49.28 per cent of the country’s external debt profile, most of the increases in the last three years occurred in the area of commercial loans, the newspaper reported.

According to the DMO, commercial foreign loans, which stood at $1.5 billion as of June 30, 2015, had risen to $8.8 billion as of June 30, 2018.


This, according to the newspaper, means that in the last three years, the country’s exposure to commercial foreign loans has risen by $7.3 billion or 486.67 per cent.

With a commitment of $8.47 billion, the World Bank is responsible for 38.36 per cent of the country’s foreign portfolio, it asserted. 

The media uncovered that apart from the World Bank Group, Nigeria is also exposed to some other multilateral organisations such as the African Development Bank with a portfolio of $1.32 billion and the African Development Fund with a portfolio of $843.47 million.

Others are the International Fund for Agricultural Development with a portfolio of $159.44 million; the Arab Bank for Economic Development with a portfolio of $5.88 million; the EDF Energy (France) with a portfolio of $64.96 million and the Islamic Development Bank with a portfolio of $16.92 million.

On the other hand, the newspaper affirmed, bilateral debts make up $2.39 billion or 10.87 per cent of the country’s external debt exposure.
The bilateral agencies to which the country is indebted are the Export-Import Bank of China with a portfolio of $1.91billion; the Agence Francaise de Development with a portfolio of $274.98 million; the Japan International Cooperation Agency with a portfolio of $74.69 million; the EXIM Bank of India with a portfolio of $4.76 million; and Germany (KFW) with a portfolio of $132.24 million.


However, the media stated that unlike the foreign debt, the domestic component of the country’s total public debt decreased marginally recently as a result of moves to rebalance the local/foreign debt ratio.

According to the DMO, a major highlight in the latest public debt data was the decrease in the Federal Government’s domestic debt, which declined from N12.59 trillion in December 2017 to N12.58 trillion in March 2017 and N12.15 trillion in June 2018.

The DMO said the reduction in the FGN’s Domestic Debt Stock arose from the redemption of N198 billion Nigerian Treasury Bills in December 2017 and another N639 billion between January and June 2018.

A total of $3 billion was raised through Eurobonds to refinance maturing domestic debt as part of the implementation of the debt management strategy for the purpose of substituting high cost domestic debt with lower cost external debt to reduce debt service costs for the government, the DMO said.

It also explained that the implementation of the Public Debt Management Strategy, whose overall objective was to ensure that Nigeria’s debt is sustainable, was already yielding positive results.

The ill-advised decision of Buhari to lead Nigeria blindly into another debts trap is dangerous because apart from massive corruption by the officials, the government has yet to plug the gaps in the crude oil sector which makes it possible for multinational companies to continue to milk Nigeria dry off the revenues from our crude oil resources and other sectors such as maritimes even as the current administration continue to pile up foreign debts that will inevitably return us to second slavery. 


Specifically, the Nigerian Maritime Administration and Safety Agency (NIMASA) had expressed worry on foreign dominance in the nation’s shipping subsector, saying that 95 per cent of income goes to foreigners.

The Director General of the agency, Dr. Peterside Dakuku, said this at a one-day seminar with the theme: Local Content Development in Shipping, Oil and Gas Logistics Operations in Nigeria, organised by Maritime Reporters Association of Nigeria (MARAN) in Lagos.

Dakuku, who was represented at the event by Assistant Director, Shipping Development, Mrs. Hannah Akpan said, 95 per cent of the income from the annual throughput of 150 million metric tonnes transactions, goes to foreigners.

He said: “Industry statistics shows that the country generates an estimated annual cargo throughput of 150 million metric tonnes with freight earnings in excess of $50 billion in her international trade transactions.

“95 per cent of this income is earned by foreigners, with the job deprivation to the country that goes with it.

“The same dominance by foreigners, is also extended to the domestic shipping market where the estimated $3 billion annual marine related spending in the oil and gas production activities are virtually earned by foreigners.”

Onwubiko is head, Human Rights Writers Association of Nigeria (HURIWA).

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