[stop-imf] Nigeria: Call to stop borrowing (opinion piece)

[robert weissman]

http://allafrica.com/stories/printable/200509270074.html
Between IMF And Our Government

This Day (Lagos)
OPINION
September 26, 2005
Posted to the web September 27, 2005

By Joe Chikunie
Lagos

The lingering question persists as to whether the World Bank and IMF can
ever have a positive impact on Nigeria? The question has even assumed a
greater importance especially now that the government is still borrowing
money from the two institutions. Recently, the Obasanjo government
borrowed a further $200 million for water projects in Cross River and
Lagos States.

At a time that the government is struggling to wriggle out of Nigeria's
debt burden, is it really wise for us to again go back for further
borrowing? The President has been quoted several times; sermonizing on
how honourable it is for one to pay his debts. It is very difficult for
Nigerians to reconcile his words with actions not only in the political
arena but also in the economic front. The water project debt will now
take 35 years to be repaid and expect interest rate to accumulate as
government officials always show great reticence in paying back debts.
They are many pertinent questions that spring up here, one of which is
whether it is wise and necessary for Nigeria to borrow but that point
will be addressed later.

First, let us take a cursory look at the background of the world
institutions namely the IMF and World Bank. During their setting up,
they were empowered by the governments which control them (led by the
US, UK, Japan, Germany, France, Canada and Italy), which hold over 40
person of the votes on their boards, with imposing economic austerity
policies in the countries of the so-called "Third World" or "global
South". Once Southern countries build up large external debts, as most
have, they cannot get credit or cash anywhere else and are forced to go
to these international institutions and accept whatever conditions are
demanded of them. None of the countries has emerged from their debt
problems; indeed most countries now have much higher levels of debt than
when they first accepted IMF/World Bank "assistance."

The World Bank is best known for financing big projects like water,
power plants and road network disguised as trying to aid economic
development, but which in practice leads to economic strangulation,
monumental environmental devastation and social dislocation. It is
ironic that while our government still obtains loans from these
institutions, the great majority of our people today endure increased
poverty, decreased access to basic amenities and a corresponding
decreased control over their own economies.

In view of the above facts, Nigerians may want to know why the
government cannot just stop borrowing considering the overwhelming facts
and history of the wreckage visited on economies serviced by IMF and
World Bank. The reason is that government official's benefit from the
policies of these bodies.

With the policies of IMF and World Bank firmly in place, government is
forced to reduce expenditure on health, education and social-oriented
projects, thereby freeing up money for debt servicing. Thus, the world
institutions get instant reward for their drive while there is an
adverse effect on the people. Conversely, the rich people in government
suddenly become business owners even while using other people as decoys,
Through the IMF/World Bank policies whereby regulations on foreign
ownership of resources and businesses are eliminated, foreign companies
dominate our economy just as government officials can easily start or
purchase other enterprises. This explains why many of our government
officials now own higher institutions of learning among many unknown
business outfits.

Furthermore, the government soon stops collecting taxes on imports;
these taxes are often applied to goods which would compete with
domestically-produced goods. This allows foreign goods easy access to
domestic markets, thereby making luxury items cheaper for those in the
country. Knowing our officials' penchant for luxurious items, it stands
to reason why this situation is very favourable to them.

One essential policy of IMF/World Bank is that it forces the hand of
government to reduce expenditures supporting reduced cost of bread,
petroleum, health-care among others. Albeit, this raises cost of items
needed to survive and make life very difficult for the poor masses. One
thing to note however is that government officials are insulated from
the attendant economic deprivations. Government earnings are used to
provide everything the officials need and they are thus totally removed
from the people. From their Golan heights, they could only stare below
at a deprived people whose impoverishment is nothing but a great spectacle!

Regrettably, it must be stated that the rich, especially in this part of
the world, crave a situation where the poor become poorer so that the
latter's subservience is always guaranteed. Wealthy men in Nigeria are
either those who are in government, who are contractors for the
government or those whose cronies are government officials. Governance
ought to be service to mankind but in our country; it provides the rare
avenue to amass wealth without any scruples.

There is this course mate of mine during our undergraduate days in the
University of Lagos. During that time, he always relied on others when
assignments are given by lecturers. He is notorious for late submissions
anyway and also for always being late to lectures. He was not a force to
be reckoned with academically and since my class at the time respects a
member either due to his intelligence or conduct, he was to say the
least a "nobody". He was always shouted down whenever he wants to make a
contribution because to us, he was a failure and one who desired no
improvement.

You can imagine my consternation the other day when I ran into him. A
convoy of cars just passed by and as I wondered why government officials
should unnecessarily harass and hound fellow road users; someone
alighted from one of the numerous jeeps. He bellowed my name and I was
bewildered to see the same young man, now rotund with fat belly and
chubby cheeks smiling at me. Remember me? He asked. It actually took me
sometime to recognize the fellow who now works closely with a minister.
He has bought many houses here and there and of course, I laughed
ruefully when he patted me on the back, it was just his way of saying
"now, I am somebody".

Looking at the fellow, I knew that no amount of increase in fuel prices
will ever affect his pocket. How can such a fellow be bothered with the
terms: inflation and capital flight? What is his business with calls for
palliatives against the backdrop of strangulating economic policies?

It is unfortunate that rather than address the fundamental issues
affecting our people, government officials always resort to name
calling, character assassination, intimidation and killing to quell
voices of dissent. Our country cannot attain development while carrying
on this way.

I am strongly of the opinion that Nigeria need not borrow especially
considering that our earnings are not prudently spent. What do we
benefit in real terms from the soaring prices of petroleum in the world
market? Increase in pump prices of petroleum of course. How do you
explain to your children who you could hardly afford to feed with a
stipend of N5,000 monthly that they now have to also go without books
and pens even when they just learnt that your salary has been reviewed
upwards to N25,000? If those children are sensitized, there surely will
be trouble at home.

The reason why the governments of most third world countries get away
with a lot of injustices against their people is that most poorly
educated and impoverished people lack the will to resist bad policies.
Interestingly, this is exactly what IMF/World Bank policies encourage.
The condition is very suitable to the aristocrats and government officials.

This explains why I am overjoyed with the new measure of resistance
being proffered by NLC against incessant fuel price increase by a
government, which has shown the greatest contempt and insensitivity to
Nigerians. What Nigeria really needs now is an enlightened populace. We
need to educate our people irrespective of harsh conditions on their
rights. They need to know that their government is in place to carry out
their wish and not the other way round.

Our people must realise that they have the capacity to resist bad
policies of government and in fact can turn down such policies. The job
cannot be done overnight but we must start in earnest.

Happily, we are already seeing manifestations of a revolution though it
may not appear too visible now. It is worthy to note the wrangling in
the PDP, the most corrupt party in Africa, the intrigue, subterfuge and
INEC's shameless conduct in Anambra State, the Apo-Six killing and its
aftermath and not forgetting the educative columns on the back page of
THISDAY Newspaper.

Gradually but surely, Nigerians will soon begin a process of cleansing
our messy system and replacing those who desire our impoverishment with
those Nigerians who are driven only by a desire to bringing smile to the
faces of teeming millions of people. Is it not dangerous and sad that up
till now, no Nigerian has really come out to articulate programmes and
ways he/she hopes to implement in a bid to save Nigeria? In this part of
the world, we do not have genuine candidates for elective positions; we
have anointed people who have overtime demonstrated a clear lack of will
and competence to occupy public offices.