Posted by By Emeka Mamah on
THE Presidency has said that part of the $36billion foreign debt owed by Nigeria was taken to purchase and stock sardines for the military in 1986
KADUNA - THE Presidency has said that part of the $36billion foreign debt owed by Nigeria was taken to purchase and stock sardines for the military in 1986.
Director General of the Debt Management Office (DMO) in the Presidency, Dr. Mansur Mukhtar who made this known in Kaduna weekend, also revealed that some state commissioners signed notorised notes (Notary public) which accepted agreements that waived Nigerian immunity with her creditors.
Mukhtar spoke while addressing members of the National Economics Students Association of Nigeria (NECA) of the Ahmadu Bello University (ABU) Zaria.
He also warned Nigerians to brace up for hard times as the Federal Government was prepared to pay the $6billion arrears on penalties in September as well as the remaining $8billion of the total debt, six months later to free future generations from the shackles of debt burden.
He said the incumbent President Olusegun Obasanjo actually began the jumbo borrowing from our creditors in 1979 before handing over to Alhaji Shehu Shagari.
Mukhtar said Obasanjo took $3billion in two tranches, adding however that the subsequent civilian administration of Shagari compounded the debt profile through profligate spending thereby cultivating consumption habit that was not sustainable for the economy.
'And it was very revealing, some of the loans that we saw. Figures, monies, huge amount of money taken to buy Sardines and stock for the military. Huge amount of money signed up to buy hospital equipment that never arrived.
'But we had all the legal documentations that had been signed and sometimes our own people, commissioners at the state level, signing a notorised note (notary public) that they have duly accepted those things.
'But many of the agreements had also clauses that waived our sovereign immunity, meaning that if Nigeria failed to service any of those debts, any of the creditors could go to court not in Abuja or Zaria or Lagos, but a court in London.
'It is very specific about the jurisdiction either in London or Europe or somewhere and in the event of the judgment, they will lay claims to the assets of Nigeria abroad, including monies of the Central Bank and oil transactions of the NNPC. We had signed off all those. So, these were what we were confronted with when we went to reschedule" with IMF, he said.
Mukthar said that the Paris Club was reluctant to grant Nigeria debt relief because of the expensive life style displayed by the leadership in far away Paris when they went for debt negotiations in 1986.
'The first time we went to Paris Club was in 1986, but what happened? Our leadership then, people that went to Paris Clubs for these meetings, when they went to Paris, they stayed in the most expensive hotel. They kept the creditors waiting for nearly one hour.
'And they were coming; they came in five to six limousines, these long cars. So they were not taken seriously. Again they agree to reschedule over a long time and then successively, we did not meet the terms of rescheduling.
'In 1986, we rescheduled; we were not paying. In 1989, we rescheduled again. In 1991, we rescheduled again. In 2000, when we went to reschedule, we were presented $21billion that had to be rescheduled.
'But do you know what? Out of that $21billion, 24percent of that was penalties that accrued. So about $5.5billion was penalty that accrued between 1992 and 2000, because then, the government had stopped servicing those debts" he further said.
Mukhtar also said that the debts were a trap and described the profile as a no-win situations since the loans appreciate as payments were been made.
For instance, he said, 'In 2001, when we have reconciled with our creditors, we were talking about a debt stock of $28.7billion. In 2002, even when we have paid money, it has gone up to $30billion. In 2003, it has gone up to $31.9billion an so on. And in 2004, we were talking about $36billion."
The DG noted that the cancellation of about 60per cent of the debt (about $18billion) calls for a sober reflection, 'a period for asking questions, legitimate questions.