Reports say that overall, the agreement allows Nigeria to obtain a debt cancellation estimated at $18 billion (including moratorium interest), representing a roughly 60 per cent reduction of the $30 billion debt the country owed the Paris Club. The granting of the $18 billion debt relief was, however, premised on the payment of an outstanding $12 billion to the creditor club, which the FG immediately instructed the Central Bank of Nigeria to settle from the excess crude oil account. The accord came less than four months after the Club agreed to the deal in principle. An obviously elated President Olusegun Obasanjo declared Friday, April 21, as Nigeria痴 exit day from the Paris Club debt trap. He insisted that his government痴 reform agenda must continue in order to free the nation from its indebtedness to the London Club and other local creditors.

The International Monetary Fund had earlier endorsed the nation痴 economic development policy and poverty reduction measures. With this development, Nigeria is not only free from the crippling $30 billion debt it owed the Paris Club, it has also been saved from the burden of debt servicing, which had consistently drained the nation痴 resources. With debt relief, the nation痴 financial situation should become more stable, while its credibility in the global economy would appreciate. By the same token, it is expected that the debt relief would fast-track sustainable economic growth and poverty reduction.

Beyond the official euphoria about the debt relief, however, the gesture has generated mixed feelings among ordinary Nigerians who had no hand or say in the accumulation of the debt, but who bear the crushing burden of the repayment. This vividly reflects in the nation痴 decrepit infrastructure, mass poverty and generally depressing living standards. Contrary to the rosy picture of the nation痴 economic performance usually painted by government officials, UNICEF says the health status of the Nigerian child and mother is deteriorating because of the poor state of the nation痴 health system.

With local manufacturers・40 per cent cost disadvantage when compared with their counterparts in other parts of the world, ordinary Nigerians are made to bear the brunt of the rot in the power generation system. The Manufacturers Association of Nigeria has attributed the harsh business climate to epileptic power supply, poor infrastructure and inefficient port administration, among others. With less than 10 per cent dependence on public power supply, alone, MAN says high cost of doing business has so far led to the closure of hundreds of companies and 45 per cent decline in capacity utilization.

In spite of high crude oil prices in the international market in the last seven years, Nigeria is still grouped among 50 countries in Africa, Latin America and Asia with a very high poverty level. The Human Development Report of the United Nations Development Programme has also described the government痴 efforts in poverty reduction as 砺ery poor and lacking in accountability and equity・ Last year, the IMF mission reported that corruption, poor state of basic infrastructure and weak institutions remained the major deterrents to investment, sustainable growth and improvement in social welfare. The report said employment growth was scant and the cost of doing business discouraging, despite contrary official claims.

Presently, the debt relief, dear as it is to the FG, appears meaningless to ordinary Nigerians. The apathy can be reversed when savings from the gesture translate to better infrastructure, health care delivery system, affordable education and other basic necessities of life.

THE PUNCH, Friday April 28, 2006