Echoes of Divergence Within: The Politics and Politicisation of Nigeria's Debt Relief

Abstract

Nigeria has been weighed down over the years by a huge debt overhang and has had to contend with several reform programmes prescribed by the multilateral institutions of the IMF and the World Bank. Ordinary people, especially women, children and the under-privileged, have been the worst victims of the fallout from these reforms. Recently, Nigeria was granted debt relief to the tune of US$18 billion by the Paris Club of creditors, with the proviso that the country would pay a total of US$12 billion of its remaining debt, in two equal instalments, within a specified period to the Club. Nigeria has since met this obligation and exited from the Paris Club debt trap. However, debt relief, which ought to have elicited public gratitude, instead unleashed a wave of cynicism. Opposition to the relief package emanated from popular perception of the Paris Club members as institutional loan sharks and authors of the gross contradictions in the Nigerian economy. This article distils these contradictory opinions. It argues that the optimism which the Paris Club of creditors expressed in their press release, and which the Nigerian Government holds as a sacred economic truth, namely that the debt trade-off would free resources for the rapid development of Nigeria, was hopeful at best and manipulative at worst.