Nigerian Vice President Condemns International Debt Structure

Mr. Atiku Abubakar in a UCLA address sharply condemns lending practices of the World Bank and the International Monetary Fund, and scores the exclusion of Africa from the UN Security Council.

"In the late seventies Nigeria borrowed only $2 billion from the international community. Today it has paid about $28 billion US dollars, and yet still has an outstanding debt."

Nigeria's vice president, Atiku Abubakar, in an address in Covel Commons at UCLA blamed unfair lending practices by international agencies, particularly the World Bank and the International Monetary Fund, for much of the lack of economic progress of Africa's emerging democracies. He also castigated the United Nations for its failure to offer a seat on the Security Council to any African state and chided developed nations for failing to invest in Nigeria despite his country's extensive program of economic liberalization and privatization. At the same time, the Nigerian leader pledged cooperation with the United States in the international fight against terrorism and efforts to combat the spread of HIV/AIDS. The meeting was sponsored by the James S. Coleman Center for African Studies. It was chaired by UCLA International Institute Vice Provost Geoffrey Garrett.

Nigerian Vice President Atiku Abubakar led a large delegation to the University of California February 26 for a speech on his country's history and current policy. Among his entourage was Foreign Affairs Minister of State Mallam Saidu Samaila, and three governors including  Obong Victor Attah, governor of Akwa Ibom State; Orji Ozor Kalu, governor of Abia State; and James Ibori, governor of Delta State. He was also accompanied by his wife, Titi Abubakar, currently working on her PhD in Washington, DC. Abubakar had a distinguished career in the Nigerian Customs service and in private business before assuming the vice presidency in 1999. In office he has been a strong advocate of strengthening the private sector.

New Democracies and the Heritage of Colonialism

Abubakar pointed to the growth of democratic governments in Africa as evidence that the continent is surmounting the damaging heritage of centuries of colonial rule. "Most African countries after independence," he said, "had a lot of problems which in most cases culminated either in military dictatorships or in life presidencies or definitely governments that were undemocratic. In the last decade the continent has been in transformation all over Africa, African nations becoming really more democratic." He pointed to Nigeria with its 150 million people as the largest and "the undisputed leader among the emergent democracies of Africa."

The rooting of democratic institutions was particularly difficult, he said, because of the damage done by foreign domination. "Colonial rule, in whatever form, did more than subjugate the sovereignty of African states and societies. It ensured that Africa's experience in the evolution of the modern international system was largely from a disillusioned perspective. For instance, in the First and Second World Wars, two major events which have had tremendous impact on the evolution of the global order, Africa participated as discrete subjugate colonies, fighting because of different colonial powers with little or no consideration of our own. The nature of colonial rule itself left devastating social and economic and psychological effects on African people. Overpowered and denied the opportunity to develop their potentials along the lines of their unique social, cultural peculiarities, African countries were forced to grow according to the whims and preferences of their colonial masters."

Willing Allies in the Global Battle with Terrorism

Abubakar called on the developed countries to make a place in the international system for the new African democracies. He urged the United States to look on the late-blooming African democracies as willing allies in the world fight against terrorism. "Today, the United States is in the forefront of the war against terror. As the scope and dimensions of that conflict widen, the imperative of building a truly global coalition becomes more profound. Recent events in Afghanistan, Kenya, Tanzania, Iraq, the United States, and elsewhere unmistakably emphasize one lesson. And the lesson is this: That this is a conflict beyond borders. This is a conflict without volunteers and devoid of flanks."

He cautioned, however, "that we must be careful not to destroy in the process the very principles we are fighting to establish, the principles of freedom, liberty, human rights, tolerance, and rule of law."

Abubakar also called for an international effort to "deal with the ravaging scourge of HIV/AIDS,"  noting that with the current global movement of peoples, no country can be isolated from the threat of the disease: "Our victory in this battle lies in the strength of the weakest unit of the human chain."

Debt to International Creditors, Market Reforms, and American Protectionism

The vice president did not blame disease for his continent's weak economic performance. Rather he pointed to its deepening debt to developed creditor nations. "Coming from a historical background of serious disadvantage into a world order ruled by the dictates of the privileged, the emergent democracies of Africa are groaning under a huge debt burden which often threatens their very existence."

He also expressed disappointment that investors from the developed country have not responded to Nigeria's extensive economic reforms that have prioritized the private sector and the market economy. "As part of our agenda, commanding spheres of our economy in virtually all sectors have been opened to private investment. Tremendous opportunities await those individuals and institutional investors who demonstrate faith in the giant of Africa, now awaking from her sleep since the establishment of democracies in the continent about five years ago."

A third difficulty for Nigerian development, he said, has been trade barriers erected by the U.S. and Europe. "Access to developed nations' markets has been hampered by policies of protecting against products from developing nations, while the latter are more often made dumping grounds for all types of imported products."

Some Figures on Nigeria's Foreign Debt

Atiku Abubakar charged the international banking system with unfair lending practices, declaring, "In the late seventies Nigeria borrowed only $2 billion from the international community. Today it has paid about $28 billion US dollars, and yet still has an outstanding debt of nearly $30 billion US dollars, indicating that something urgent needs to be done because something is wrong somewhere. Otherwise generations yet unborn will be denied critical resources for development, or even survival. And it is not only Nigeria which finds itself in this category. Most emerging African countries are under the same situation."

He said that Nigeria would not renege on this debt.  "But how can we do it," he asked, "when the IMF and the World Bank say that out of our $11 billion US dollars per annum we should pay 3?" He pointed out that the international banking agencies have sometimes forgiven developing countries' obligations for noneconomic reasons.  "Some nations have been favored with decisive, even radical measures, to alleviate their foreign debt when such measures become politically useful to the creditor countries. The case of Pakistan during the invasion of Afghanistan is an example."

Africa's Nonrepresentation in the UN Security Council

Another complaint by the Nigerian vice president was the lack of African representation in the leading body of the United Nations. "The structure of the Security Council was created at the very birth of the United Nations," he said, "at the end of the Second World War and the beginning of the cold war. Fifty-eight years have now passed since then. Massive changes have occurred in the world, particularly in recent years. Empires have crumbled. The ideological division of the world has melted away. The cold war has ended. The membership of the United Nations has multiplied from 52 at the time of its founding to over 180 today. Yet, apart from the enlargement from 9 to 15 of its membership forty years ago, the Security Council has not changed significantly. It has remained small, unrepresentative, undemocratic, and closed."

Should the Policy of Economic Openness Be Continued?

In the question period, chair Geoffrey Garrett summarized questions submitted from the audience. He asked first whether Nigeria's policy of economic openness to the outside world should be continued when it has not shown any significant improvement in per capita GDP.

Atiku Abubakar responded by noting that the first step in opening up was taken among African countries themselves, "We tried to form originally regionally, to promote trade, investment, and commerce among African countries." This was followed by programs of deregulation, liberalization, and privatization. "Just like in other parts of the world, when African countries gained independence it was felt that government should be involved in everything. And in fact government was involved in everything. Government was involved in governance, and government was involved in business."  Abubakar defended the recent privatization of many sectors formerly under government ownership, saying that it was other factors that have stymied a growth in GDP. "One, of course, very very important factor that you always overlook is the issue of debt. There is no emerging African democracy that is not living under the crushing effect of heavy debt burden. I just gave you the example of Nigeria." A second factor is that "this liberalization and deregulation which we have introduced in our economies is not getting the needed impetus and injection of foreign investment from the developed democracies of the world. They are not coming as would be needed to jump start the economies of these emerging democracies."

He gave some examples. "There is very little foreign investment that came into privatization of most of the enterprises that we have undertaken. Take telecoms. The only foreign telecom company that invested in Nigeria since we deregulated and liberalized the telecom sector was a South African company, MTS. The add-on tool companies are all indigenous and they borrowed their finances from the banking system within the country. Now, unless you have foreign investment from developed economies and unless you do something about the debt burden, no matter what kind of economic reforms we introduce in these emerging democracies you will continue to be weighed down by these two factors."

How to Stop Brain Drain

Next he was asked if sending Nigerian students abroad for education was a good idea if they sometimes did not come back.

The vice president responded, "It is good for Nigeria to allow her citizens to acquire international experiences. It is in the interest of our own national development. It is also good for them to come back and use those best international experiences in nation-building at home. But you have to create the opportunities for such people to do so. Of course, the only way you can create the opportunities to do so is to make sure that you create enough jobs to do that. Government alone cannot create enough jobs. In fact, now we are shedding jobs. I will tell you how we are shedding jobs in government. Government used to be responsible for telecoms. We are no longer responsible. It is now in the private sector. Of course, this has created more jobs, because when the South African company came in it created thousands of jobs. When Econet [a wireless cell phone company] came in it created thousands of jobs. So the jobs are now being created by the private sector as opposed to government. All government does is create the environment for their jobs to exist. The same thing is going for power. The same thing is going for refineries. Almost every aspect where government was involved is being turned over to the private sector. . . .

"I am one of those who are unrepentant advocates of that economic reform in my country. I know I go through a bit of hell, but I believe that time will prove us right. And the private sector creates more jobs than government, jobs that help to develop the country better and faster than government. . . . Therefore we will encourage our citizens to acquire international best experiences, and will also encourage and support them to come and put into practice those international best practices by working together with the private sector to make sure that our country develops."

A Consular Office in Los Angeles?

For the final question, Geoffrey Garrett asked, "Are there plans to open a consular office in Los Angeles, and if so when?"

Atiku Abubakar replied that he had just come from talks in Sacramento with state officials agreeing to setting up a Nigeria-California Business Council. "This council is going to be formed immediately I get back home. It is going to be a partnership between the private and public sector in the State of California and the private sector and the public sector of the Federal Republic of Nigeria, to explore and open up the two economies to investment, trade, commerce, and the rest." He added to cheers from the audience, "We have decided to reopen our consulate on the West Coast and the natural place is to move it from San Francisco to Los Angeles. That will be set in motion as soon as the minister of foreign affairs returns to Nigeria."

Published: Thursday, March 25, 2004