DEATH OF A PRESIDENT IN TOGO AND EXTRA CONSTITUTIONALITY

AFRIPOL.ORGIDEAS HAVE CONSEQUENCES

AFRICA AND FOREIGN DEBT             By Stevie C.Chiakwelu

The progress of the enormous debts which at present oppress, and will in the long-run probably ruin all the great nations ...            -Adam Smith                                      -

A linguistics sociologist once defined a disaster as something one can smell, touch and feel. African foreign debt is an enormous disaster; its ugly consequences litter everywhere even along the roadsides. Yes, a great disaster indeed! You can smell it, touch it and feel it in Africa’s heartland.

Africa received $540 billion loans between 1970-2002, she paid back $550 billion (i.e. principal with interest inclusive) and she still owned $295 billion as at the end of 2002.

Africa from what we can deduce, has overtly tied herself to the apron string of foreign debt payments. Unfortunately these payments are endless. The borrowed principal has already been paid, yet the interest continues to accrue at a whopping rate. With such a trend, it is erroneous to believe that the continuous rescheduling of the debt payment by Paris club or any other allied group could proffer lasting solution but fire brigade approach. This will only succeed in delaying the great disaster that is lurking behind.

Already the disaster has arrived! The effects of the disaster have commenced amplifying and will continue to permeate to all facets of life in Africa. Without mincing words, the people that are hardly hit by the brunt of the debt services are the poor and the children. Majorities of Africans fall into these categories. It is pathetic to note that qualitative education, good health care, affordable shelter, clean and drinkable water supply, sewage system and reliable power supply have all eluded these poor people. Their government in question has failed in providing basic amenities that will affect them positively, all in the name of servicing foreign financial obligations.

Enough is enough. This abuse and torture meted out on Africa as a result of these foreign debts have diminishing impact on the well being of the continent. Without deferment or holding back, somehow, something must be done to bring this apparent disaster to an end. A sensible and constructive compromise must be reached with the western creditors and international bankers.

It is truism to acknowledge that self inflicted torture rooted in ignorance, naivety and lack of intellectual insight on the part of the greedy and corrupt African leaders, who took out the loans in the first place, created such an agonizing situation.

The western bankers and financial institutions did not twist round African leaders with their little fingers in order to compel them to borrow to their demise. It was their choice to borrow, most times, they were propelled by avaricious inclination and in the process they stole from their constituencies without minding the ensuing retardation it will have on the economy in particular and populace in general. Corruption is and has been the bane of development in Africa.

Most of these debts were accumulated during the cold war. During the era of bipolar world, African leaders were granted loans at the height of cold war for political reasons and these had nothing to do with sound financial decisions. The funds were wasted on some white elephant projects or rather siphoned to some secret bank accounts that were beyond spying eyes of an average African. Most of these loans were acquired without the consent of the citizenry, ironically now; they are the ones absorbing the greatest burden of the loan services.

In Congo, the maximum President, late Mobutu, took out so many loans that were indirectly deposited into his France bank accounts.

Nigeria was granted loans particularly because of her oil wealth, unfortunately some of those loans were more or less not put to good use that would alleviate the sufferings of her people by creating employment opportunities and enabling environment for a sustainable industrial growth. The vast majority of Africans were aware of their leaders’ misadventures but were helpless and as well powerless to compel them otherwise. Even Apartheid South Africa borrowed money without the consent of the black majority. Today who is paying the price? There is this clarion call to African citizens to pay back the loans with the shocking interest rate that was acquired without their blessing. Though this may be inimical to their psyche, the Black South Africans have to pay back the loans of apartheid era. The Congolese have to pay back loans made out to their dictator.

African governments at the expense of their peoples’ livelihood carry out debt payments and in some countries, a great chunk of their GDP is devoted to these loans services. Those funds would have been ordinarily invested in healthcare and education, the two core areas that needed immediate attention in Africa. The money owned to the industrialized nations have so much quadrupled, due to the malleable interest rate. It is beyond anybody’s wildest imagination on how these debts will ultimately be repaid in this lifetime. It will also be inconceivable and fallacy to believe that they can be repaid in this our generation or the one to come, if nothing is urgently done.

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DEBT CANCELLATION AND AFRICA 2006
The triumph of Dialogue and Leadership have been registered with the 100% debt cancellation for 18 Heavily Indebted Poor Countries by G8 nations. Most of these countries are in Africa.
The debt cancelled was $16.7 billion owed by 18 countries - Benin, Bolivia, Burkina Faso, Ethiopia, Ghana, Guyana, Honduras, Madagascar, Mali, Mauritania, Mozambique, Nicaragua, Niger, Rwanda, Senegal, Tanzania, Uganda and Zambia.

In another development, Nigeria was also granted a $18.309 billion debt relief by Paris Club of Creditors. This debt arrangement translate to 60% of the total $30.515 billion owned to it by Nigeria. The conditional stipulation is for Nigeria to pay $12.4 billion from its debt arrears, this is not debt cancellation akin to the 18 HIPC by G8. This deal must be fully examined, analyzed and absolutely comprehended before its acceptance and implementation.
A communiqué issued by the Paris Club titled “Paris Club Creditors Agree in Principle on a Comprehensive Debt Treatment for Nigeria," read thus: “The representative of the Paris Club creditor countries met in Paris on 29 June 2005 and expressed their readiness, consistent with their national laws and regulations, to enter into negotiations with Nigerian authorities in the months to come on a comprehensive debt treatment."
APRIPOL is canvassing and looking forward to the total and unconditional write-off of the entire Africa‘s foreign debt in order to achieve the UN Millennium Development Goal of halving global poverty by 2015. Developmental aid should also be given to those nations that have democratic systems with checks and balances. And to those countries that respect human rights and are willing to fight corruption.

From L- R President Clinton, Gates, Mbeki, Blair, Bono & President Obasanjo

AFRIPOL extol this affirmation and congratulate G8 nations, Paris Club of Creditors, The Commission for Africa, The Jubilee Debt Campaign, DATA, World Economic Forum & others. In addition, men and women of goodwill who initiated and championed the struggle for debt cancellation, poverty alleviation and diseases eradication. These people are:
Music superstar Bono of U2, the founder of DATA
President George Bush USA, The leader of the Free World
Tony Blair, the Prime Minister of Great Britain
Gordon Brown, Chancellor of the Exchequer of Great Britain
Thabo Mbeki, the President of South Africa
Olusegun Obasanjo, the President of Nigeria
Dr. Ngozi Okonjo-Iweala, the Minister of Finance Nigeria
Dr. Noreena Hertz, the Author of The Debt Threat

Dr. Jeffrey Sachs, founder of Earth Institute & Author of the The End of poverty
Kofi Annan, the Secretary General of UN
Microsoft founder Bill Gates and Gates Foundation.
Nelson Mandela, former President of South Africa
Former Presidents Bill Clinton and Jimmy Carter of United States

LEADERS OF GREAT 8 AND RICHEST NATIONS

AFRICA’S DEBT REMISSION: UNDERSTANDING G8 AND PARIS CLUB PROPOSALS.
A critical analysis must be delved in order to fully understand the just concluded debt relief of the 18 Heavily Indebted Poor Countries by G8. The initiative for HIPC debt cancellation for debts owned to World Bank, IMF and African Development Bank were extended to them because those nations have reached the “completion points” as were proposed by their creditors and G8.Initially 22 and 24 countries were proposed by Canada and Britain's respectively for 100% debt cancellations. But only 18 countries were able to meet the stringent requirements for the debt cancellation. Fourteen of these countries are in Africa.
There are salient points that must be highlighted in this historic milestone :

1. Sixty two countries were recommended for debt cancellation by civil groups because of their dire poverty, diseases and starvation. But only 18 countries were approved for debt cancellation.
2. The nominally debt owned by these 18 nations is about $40 billion. But the actual cost to the creditors is between $(15-18) Billion and that is the amount needed to payoff the debts.
3. The modalities for the payment of the debts by G8 to the multilateral financial institutions namely The World Bank, African Development Bank (ADB) and IMF have been planned and mapped out. These are the institutions that are the creditors of the 18 nations. The World Bank and ADB will have G8 countries pay according to percentage of their relative shares in the institutions. And the IMF, its resources worth about $4 billions in gold will be utilize for the reimbursement to the institution. This implies that every member nations of IMF is paying for the debt write off by the G8. After all the IMF resources are the collective ownership of its financial members.

NIGERIA AND PARIS CLUB OF CREDITORS: The cancellation of Nigeria’s 60% of the $31 billion debt owned to Paris club creditors was a historic milestone.
A great deal of credit must be accorded to the democratic administration of President Obasanjo, for its implementation of the stringent economic reforms led by the Finance Minister Dr. Ngozi Okonjo-Iweala, which culminated to the debt relief. Let’s reflect on Nigeria external debt.
In 1985, Nigeria owned $8 billion to Paris club creditors, out of $19 billion of its foreign debt.
By the elapse of 2004, Nigeria was owning Paris club $31 billion out of $36 billion of its foreign debt. Since 1992, Nigeria have not receive any loan from Paris club. So, where is the justification for the increase of the debt? Blame it on the malleable interest rate, interest arrears and interest charged on the arrears. And the political and monetary instability that did contribute to the debt increased.
The political situation prior to return to democracy, was tantamount to adding insult to injury. Making it nearly impossible for Paris Club to negotiate with Nigerian leadership. The exchange rate then was not realistic nor was Naira subject to market forces, another obstacle for any viable negotiation. Now the condition for this debt cancellation is that “Nigeria will pay off $6 bn owned in arrears to creditors. It will then receive 67% debt relief worth $16.7 bn, on its remaining debt, and finally buy the remaining $8.2b it owes at discounted market rate.” Nigeria have repaid $42b over past 38years. The Paris Club would have cancelled the total debt, rather than requiring for the debt buy back of the 40% of the remaining debt. Nigeria has a good record of servicing and meeting its debt obligations, and have paid its principal and reasonable interest on the debt, that can justify 100% cancellation. IN TOTALITY, NIGERIA WILL PAY BETWEEN $(12-12.5) BILLION IN RETURN OF $18 BILLION IN DEBT RELIEF.
The billions of dollars that Nigeria will be paying is larger than the amount rich nations will be providing to poor countries in a period of ten years.
© 2006 AFRIPOL.org

WHY DEBT CANCELLATION FOR AFRICA?
In this continent, the four horsemen of the apocalypse - conquest, conflict, famine and death are no mere visitors. They have taken up residence.
-Martin Wolf (Financial Times)

In view of mismanagement of Africa’s resources and funds; even the looting of her treasury by some of her leaders, it can be said thereof, that corruption has attained an alarming proportion in the continent. In fact, it has eroded the system. It may therefore, sound incredible and laughable when one suggests that time has come for a cancellation or rather a major debt relief to Africa’s enormous foreign debt.
The cost of the foreign debt payments to the African citizens is not a child’s play. The funds that would have been used to upgrade the health care system and quality of education were diverted to debt servicing and payments. African children are paying the price for debt servicing.
These debts are owed to industrialized nations. African governments have been unable to meet up with their financial obligations and have resorted to continuous rescheduling of the loan payments as regulated by International Financial Institutions and their agents, such as IMF, London Club, Paris club, World Bank and others.
As years progress, so also the burden of the debt widens. However, all the stakeholders fully take cognizance of the fact that these loans seem impossible to be liquidated with ease.
So many figures have been thrown around, but the most recent data stated that Africa’s foreign debt currently stood at $350 billions. This is outrageous, a gigantic yoke!
To buttress the level of poverty in Africa, out of the 41 nations identified as Heavily Indebted Poor Countries (HIPC) according to World Bank, 33 of those nations are from Africa. Africa has nothing to show for such an enormous debt but weak and dilapidated infrastructures with a very devastating low human development index.
Below are the intrinsic reasons why APRIPOL subscribe to debt cancellation for Africa, which must go forward without much ado or conundrum:

1. Mutual Benefit: Africa and the West can share an affirmative interdependence based on mutual respect and benefit. This can only be possible when the burden of debt is released from African’s shoulder. When Africa is stable, this spells well for democracy and capitalism. This will in return stimulate trade.
2. Global Stability: A healthy and wealthy Africa will contribute to the world stability. Moreover, Africa will have the adequate resources to make impact in resolving conflicts within her continent. This is good for Africa in particular and the world in general.
3. Social Security and Freedom: Actually, the brunt of the debt payments mostly rests on children and women and not on African leaders. Those who absorb the agonizing pains are the poor masses. For them, there is no job; no food; no shelter. The leaders hide under the guise of being incapacitated because of foreign debt payment obligations, to shy away from their responsibilities and they allow the masses to wallow in abject poverty while they themselves live flamboyantly and affluently. Therefore the debt cancellation at least, if judiciously managed will affect the poor positively, when such funds are channeled to areas that will make life worth living.
4. Non Restrictions on Economic Policies: The truth is that as a result of these foreign debts, the West directly or indirectly dictates Africa’s economic policies. Africa’s economy is import driven. They rely heavily on importation. It is not always economic policies that suit African that matter but those that are favored by the foreign creditors. That is why their policies are tailored to suit foreign debt demands. If debt relief is granted, Africa can now employ policies that will be considered unique to her economic goals.
5. A Clean Slate /Economic Freedom: What Africa desperately needs now is a fresh beginning. For the fact that the debts are cancelled, it will give Africa hope and a sense of belonging. Africa will now put up confidence to bargain for what is good for the continent in the comity of nations without ego problem of being indebted.
6. Africa's History: Yes, it is important too. This is not just to be visceral but to be realistic to Africa and again for the sake of history, Africa has suffered untold hardship via slavery and colonialism. This time around, reasonable people can conclude that Africa needs a push.
7. Principal Loan Accomplishment: The actual principal borrowed had been paid. The problem now is the accumulated interest over the years and it is still going up. It is point clear now that Africa has demonstrated concerted commitment to her financial obligations.
8. State of Health Care in Africa: Against all odds, a case must be made for a sound healthcare in Africa. There is no fund to implement Africa Union agenda on health. The cost is beyond the resources and funds at hand. AIDS, Malaria, Polio, Ebola are confronting Africa. This continent needs the funds to aggressively fight back these killer diseases.
9. Promotion of Democracy: A political paradigm based on fairness and equality with broad-based representatives known as Democracy cannot survive on an empty stomach. Democratic system of government is quite expensive to operate. For democracy to have a true light of the day in Africa, the needed resources must be available.
10. Reinforcement of Economic Capitalism: For Adam Smith’s concept of free enterprise to take hold in Africa, Africans must have good impression of capitalism. These foreign loans servicing and payments do not augur well for capitalism and laissez faire before the suffering masses of Africa. Africa’s weak and dilapidated infrastructures must be developed to international standard. This will enable industrialization and investments to be realized in the continent.
© 2006 AFRIPOL.org

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