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FACT CHECK: Keyamo’s claim that Nigeria’s debt cancellation came on a platter is false
The spokesman of President Muhammadu Buhari’s re-election campaign, Festus Keyamo, and that of the Abubakar Atiku campaign, Segun Sowunmi, went head-to-head on Channels Television’s Sunrise Daily on Monday, to try explain to Nigerians why their respective principal is more qualified to lead the country come 2019.
Among the many claims made by Keyamo in trying to demarket Atiku, was that the Olusegun Obasanjo administration, in which Atiku served as the second in command, did not do anything special to merit Nigeria’s debt cancellation in 2006.
Keyamo implied that Nigeria could have had its debt cancelled anyway whether it took any stop or not.
“Let Nigerians not go away with the impression that there’s some kind of wizardry in negotiating debt forgiveness. It’s a lie. The G8 at that time took a policy to forgive debt in Africa. There was no wizardry on the part of Nigeria. 18 countries benefitted (from that policy),” Keyamo said.
And to buttress his ‘facts’, Keyamo invited Nigerians to google “G8 debt forgiveness 2004/2005” and see evidence that the debt forgiveness was an unmerited gift to Nigeria.
CLAIM 1: Countries that benefitted from the G8 debt cancellation
Contrary to Keyamo’s claims, Nigeria was NOT one of the countries that benefitted from the G8 debt cancellation initiative of June 2005 to which Keyamo alluded.
According to an International Monetary Fund factsheet, the idea, which was tagged the Initiative for Heavily Indebted Poor Countries (HIPC Initiative), was a collaboration between the IMF, the International Development Association (IDA) of the World Bank, and the African Development Fund (AfDF), to cancel 100 percent of the debt claims of “countries that had reached, or would eventually reach, the completion point—the stage at which a country becomes eligible for full and irrevocable debt relief”.
The countries that benefitted were 38 in all, and they were as follows: Afghanistan, Burkina Faso, Burundi, Central African Republic, Chad, Democratic Republic of Congo, Ethiopia, The Gambia, Ghana, Guinea-Bissau, Liberia, Madagascar, Malawi, Mali, Mozambique, Niger, Rwanda, São Tomé and Príncipe, Sierra Leone, Tanzania, Togo , Uganda, Benin, Bolivia, Cameroon, Comoros, Republic of Congo, Côte d’Ivoire, Guinea, Guyana, Haiti, Honduras, Mauritania, Nicaragua, Senegal, Zambia.
Also, Cambodia, Tajikistan, benefitted from the initiative even though they were non-HIPC countries, but they had a per capita income below $380 and outstanding debt to the IMF.
Keyamo was right that the G8 reached a decision to forgive indebted countries, but he was wrong that they were all African countries and that Nigeria was one of them. Only 14 of the countries are in Africa, and Nigeria was clearly not one of them.
CLAIM 2: Debt forgiveness came on a platter
The G8 debt cancellation did require some efforts or ‘wizardry’ as Keyamo put it on the part of benefitting countries. The IMF stated that there were requirements to be met before countries could have their debts forgiven them.
According to the IMF factsheet, “to qualify for debt relief, the IMF Executive Board also required that these countries be current on their obligations to the IMF and demonstrate satisfactory performance in macroeconomic policies, implementation of a poverty reduction strategy, and public expenditure management.
So Keyamo was also wrong on this claim. The countries that had their debts forgiven had to meet a set standard which only a handful of countries could meet.
There was some “wizardry” in Nigeria’s Paris Club debt release.
Negotiations continued after Nigeria missed out of the HIPC initiative. These negotiations culminated in the Paris Club writing off $18 billion or 60 per cent of the total $30 billion being owed it by Nigeria in October 2005. The group, at the time, also promised to raise the amount of the debt to be cancelled to $20 billion or 67 per cent.
Among other explanations that led to the partial debt cancellation, the Paris Club said the gesture was in recognition, as well as part of its contribution to Nigeria’s efforts at economic development, adding that “It would also help Nigeria in its fight against poverty”.
“Creditors welcomed Nigeria’s willingness to conclude a Policy Support Instrument (PSI) as soon as this new instrument is approved by the board of the IMF, to pay all its arrears towards Paris Club creditors and to treat them equitably,” a statement issued by the Paris Club read at the time.
Keyamo’s claim that the 2005 debt pardon to Nigeria by the Paris Club required “no wizardry” is at best misleading, and at worst, FALSE.
The Obasanjo administration, under which the former Finance Minister, Okonjo-Iweala worked, worked hard to qualify for the debt cancellation.
This much was also acknowledged by former Minister of Environment, Amina Mohammed, who resigned from Buhari’s cabinet to take up the role of the United Nations Deputy Secretary-General.
While having a televised chat with the current Managing Director of the IMF, Christine Lagarde, Mohammed said, “One of the reasons that we succeeded with the debt relief that Nigeria got from the Paris creditors was because we had the MDGs (Millenium Development Goals)”. But Lagarde cuts in, “I would add something, it [the debt relief] was also caused by one Nigerian woman (Ngozi Okonjo-Iweala).”
“I was on the other side of the table for that negotiation,” Lagarde continued, “and she [Okonjo-Iweala] carried the water for Nigeria.”
Mohammed agreed with Lagarde, but added, regrettably, that though “It took her (Okonjo-Iweala) a few years to convince people, we are now back again [in debt] in my country”.