<\/p>\n\n\n\n
When\nGeneral SaniAbacha (1943-1998) <\/em><\/strong>took over from Chief Ernest\nOladeindeAdegunleShonekan<\/em><\/strong> on November 17, 1993<\/em><\/strong>, he pegged\nthe official rate at N21 <\/em><\/strong>to $1US<\/em><\/strong> dollar. In the\nblack market it was running close to N50 per $1US dollar,<\/em><\/strong>that is\nif you can get it to buy. The official rate of N22 <\/em><\/strong>per dollar\nstayed throughout the tenure of General SanniAbacha<\/em><\/strong>.<\/p>\n\n\n\n On January\n16 1995,<\/em><\/strong> the Minister of Finance, EtubonAsuquo Anthony Ani <\/em><\/strong>(80)\nfrom Calabar in Cross River state, announced that the official rate of the\ncountry would be N22 <\/em><\/strong>to 1US dollar. <\/em><\/strong>He declared on\nthat day while presenting the 1995 <\/em><\/strong>budget that \u201cOur outstanding\nexternal public debt stood at the equivalent of US $29.43 <\/em><\/strong>as at 31st\nOctober<\/em><\/strong>, 1994<\/em><\/strong>, which includes US $6.8 billion<\/em><\/strong>\npayment. Out of this amount, the sum of US$22.7 billion <\/em><\/strong>was debt\nowed by the Federal Government and her agencies, while about US $6.7\nmillion <\/em><\/strong>was debt contracted by various State Governments. A further\nbreakdown of the external financial indebtedness shows that the debts were\ncomposed of Multilateral debt\u2014US $4.4 billion,<\/em><\/strong> Paris Club Debts\u2014US\n$18.3 billion<\/em><\/strong>, Commercial Banks (London Clubs) US $2.1 billion,<\/em><\/strong>\nPromissory Notes\u2014US $3.2 billion,<\/em><\/strong> other bilateral (Non Paris\nClub) US $1.4 billion. <\/em><\/strong>It is estimated that about US\n$4,397.762 million <\/em><\/strong>will be required to service current maturities and\ninterest charges on external debts in 1995 <\/em><\/strong>fiscal year.\nGovernment has however decided to earmark US $2billion <\/em><\/strong>for\nexternal debt servicing for the year because of budgetary constraints\u201d. <\/p>\n\n\n\n He\nsaid further \u201cas the Head of State indicated in his Budget speech, efforts will\nbe intensified in 1995 <\/em><\/strong>to conclude with the World Bank and the\nInternational Monetary Fund negotiations on a Medium Term Economic Adjustment\nProgramme (MTP<\/em><\/strong>), Nigeria had formulated the draft of the MTP\n<\/em><\/strong>and had been discussing it with the two Bretton Woods Institutions\nsince 1993<\/em><\/strong>. Contacts have been made with the IMF and renewed\nefforts will be made in 1995 <\/em><\/strong>to reach final agreement on the\nprogramme which is expected to pave the way for Nigeria to enjoy concessional\ndebt relief and the inflow of concessional resources from multilateral and\nbilateral sources. Due to Nigeria\u2019s debt condition, external borrowing in the\n1995 will focus on concessional funds which attract low interest rates and are\nrepayable over long periods such as IDA<\/em><\/strong>, ADF <\/em><\/strong>and\nsoft bilateral credits. Such a shift to concessional facilities will help in\nreducing our debt stock and in the long run mitigate the spectra of negative\nnet transfer of resources. However, given the fact that concessional funds like\nIDA <\/em><\/strong>resources are very limited and are being demanded by\nincreasing number of countries, we may be constrained to seek fund from other\nsources such as IBRD<\/em><\/strong>, ADB <\/em><\/strong>and the International\nCapital Market as well as bilateral credits for projects that are highly profit\noriented\u201d.<\/p>\n\n\n\n The\nconfirmation by the Vice President, Professor Yemi Osinbajo <\/em><\/strong>that\nour debt profile is now over $73<\/em><\/strong> billion dollars <\/em><\/strong>is\ndisheartening considering that 13 years ago when we got the debt relief, we\nwere celebrating. Since that time we have had four Presidents\u2014OlusegunObasanjo<\/em><\/strong>,\nShehu Musa Yar\u2019dua, Goodluck<\/em><\/strong> Jonathan and now MuhammaduBuhari<\/em><\/strong>.\nSince then too we have had five Ministers of Finance\u2014DrNgoziOkonjo-<\/em><\/strong>Iweala,\nMrsNenadi Usman<\/em><\/strong>, Dr. OlusegunOlutoyinAganga, MrsKemiAdeosun<\/em><\/strong>\nand the present,HajiaZainabShamsunaAhmed. We were told as helpless as we are,\nthat these ministers were Economic magicians especially Dr<\/em><\/strong>. OkonjoIweala\n<\/em><\/strong>who served between July 15, 2003 and June 2006 <\/em><\/strong>and again\nserved from August 17 2011 <\/em><\/strong>and May 29 2015.<\/em><\/strong><\/p>\n\n\n\n With\nall the knowledge of these \u201ceconomic experts\u201d as Ministers, yet the worst is\nnot over. <\/p>\n\n\n\n But\nwe have to refer to the two speeches given by President Olusegun Obasanjo\n<\/em><\/strong>while in power on our debt profile.<\/p>\n\n\n\n The\nfirst was on June 30, 2005 <\/em><\/strong>in his broadcast to the nation when we\ngot debt relief and the other was on July 26<\/em><\/strong>, 2005 <\/em><\/strong>when\nhe addressed the National Assembly in Abuja. In the two speeches he gave us\nhope for us to celebrate and now thirteen years after there is nothing to\ncelebrate. Certainly there must be something wrong somewhere.<\/p>\n\n\n\n On June\n30<\/em><\/strong>, 2005<\/em><\/strong>, when we got the debt relief, President Obasanjo\nin his broadcast to the nation declared \u201cIt is with great joy that I address\nyou today on one of the pillars of success of this Administration. I address\nyou on it for several reasons. First, it is important that, as always, I bring\nyour attention issues of national importance. Second, it has far-reaching\nimplications, in a positive sense, for our reform agenda. Third, we have\ncollectively worked hard for it and now that the results are evident, we should\nall savour it and draw bitter lessons from the profligacy of the past. Fourth,\nit vindicates the steadfastness, sacrifices and tenacity of this government in\nits struggle to win relief from the global community in order to give us the\nrequired breathing space to make more progress. Six years into the present\ndemocratic dispensation, we have definite achievements and dividends of\ndemocracy to report. Since April 1999, after my success in the election of 199\nand pending formal inauguration, I was opportuned to travel to some important\ncountries of the world to meet with their leaders in preparation for assumption\nof office. As early as that time, I was already asking world leaders for debt\nrelief for Nigeria in addition to wooing investors. What we have now has been\ngiven assurances to expect by the Paris Club is that Nigeria will clear its\narrears of $6 billion of the $30 billion owed, following which there will be a\nstock reduction on Naples Terms while we will have to buy back the remainder.\nThis will represent, for the first time, a total exit, if you like, total\nfreedom from Paris Club debt.<\/p>\n\n\n\n \u201cThe\npackage in final terms that we are to expect would yield debt relief of 60% on\nour current Paris Club debt. We shall pay off the 40% balance through a buy\nback operation The total write off is close to $20 billion which compares very\nfavourably with the recent $40 billion write off of debts for the 18 highly\nindebted and poor countries of the world\nby the developed nations. This debt relief offered to us, I am pleased and\nproud to say, is the direct product of our relentless and persistent endeavor\nover the past six years. The point to bear in mind is that whereas negative\nthings can be done by an individual or a group in a country or of a community,\nit is often a consistent, long, arduous and painful task to bring about\nreversal or positive change. What we have achieve now is worth celebrating\nbecause what we will expect at the end of the exercise will be close to a\nrelief of $20 billion which is well beyond the total revenue of Nigeria for one\nyear.<\/p>\n\n\n\n \u201cFellow\nNigerians, how did we get to the point where our debt burden became a challenge\nto peace, stability, growth and development? Without belabouring the point, we\ncan identify political rascality, bad governance, abuse of office and power,\ncriminal corruption, mismanagement and waste, misplaced priorities, fiscal\nindiscipline, weak control, monitoring and evaluation mechanisms, and a\ncommunity that was openly tolerant of corruption and other underhand and\nextra-legal methods of primitive accumulation. These all took place in this\ncountry, before our eyes, and at times in active complicity by many of us. Even\ncommunity leaders and religious bodies accommodated corrupt individuals and\nexalted them. Money replaced traditional values, money took over our souls, and\nwe came to believe in the Machiavellian philosophy of the ends justifying the\nmeans. State governments contracted huge loans with outrageous conditions and\ninterest rates and failed to perform with the funds, most of it being\nsquandered on white elephant projects or simply looted. We often forget that\nstolen and wasted funds were monies meant for growth and development especially\neducation, health, roads, water, electricity and other social services.\nContracts became the only basis for determining transactions and engagements\nwithin the public and private spheres. We pray to God that we get beyond these\ndebilitations and develop a collective conscience that is anchored on\ntransparency, accountability, probity, value-for-money and due process. <\/p>\n\n\n\n \u201cHow\ndid we work to get out of this debt quagmire? We did it by resolving and\nworking hard to break with the past; by identifying new voices and new leaders;\nand by rejecting business as usual and voting for new values of accountability,\ntransparency, fair competition, social justice, and the upliftment of the\nliving standards of Nigerians. We revamped our institutions and put in place an\neconomic reform agenda that reduced the role of the state in the economy while\nstrengthening the place and role of private investors. We mounted a vigorous\nglobal campaign to make a good case for debt relief. We contended that in spite\nof being an oil producing country, Nigeria was not a rich nation with a\npopulation of about 150 million. With such a population, on a per capita basis,\noil receipts came to less than 50 cents per Nigerian per day. What we would\ngain from the expected debt relief will allow us to put additional $1 billion\nor N130 billion into human welfare budget of health, education, food security\nand infrastructural development. We were not defensive about the past but we\nwere optimistic and proud of our future. We mounted an unprecedented war\nagainst corruption in all its ramifications also with unprecedented results. We\ndrew attention to our numerous sacrifices in West Africa and Africa at large in\npeace keeping and conflict resolution, a task that has saved billions for the\nUN and developed countries. <\/p>\n\n\n\n On\nJuly 26, 2005, former President OlusegunObasanjo told the National Assembly\nthat \u201cthe debt profile which was a mere US$0.57 billion in 1970. In fact, in\n1979 when I voluntarily left office as military Head of State our total debt\nstock was US$3.2 billion with over US$5 billion in foreign reserve. The debt\nstock rose to US$18.5 billion in 1985 and to US$34.1 billion in 1995. It came\ndown to US$30.99 billion in 2002 and today, it stands at about US$39.9 billion\ndue largely to interest, surcharges and penalties rather than increased\nborrowing. For instance, between 1992 and 2000 principal arrears on our\nnational debt was US$10.31 billion; interest arrears was US$4.45 billion; and\nlate interest was US $5.18 billion. By the end of 2003, new arrears of US$3.78\nbillion was included in addition to principal arrears of US$1.22 billion,\ninterest arrears of US$2.4 billion and late interest of US$.2 billion. It is\nobvious that even if we managed to pay the interest and charges alone, there\nwas no way in which we could ever hope tp pay the principal. This is why it is\ncalled the \u201cdebt trap.\u201d<\/p>\n\n\n\n \u201cOf\nthe total debt stock, the Federal Government owes 75% and the State owe 25%.\nAlso, of this total, we owe 83.16% to the Paris Club, while the balance is made\nup of multilateral and commercial debts. I have always said that an individual\nor group could bring down a country easily but to rebuild could be an arduous\ntask. This has been our experience. Those that ran up the huge national debt are\nindeed a minority but they had power and opportunity. They signed all sorts\nagreements at outrageous interest rates; squandered loans obtained in the name\nof development; drew down on foreign loans without executing any jobs; and in\nother cases, stole or wasted such loans. To make matters worse for Nigeria,\nthere was not one identifiable agency responsible for managing debt data\nrecording system; poor information flow across agencies and levels of\ngovernment, loans records were poorly kept; and not only did past governments\npay little or no attention to debt management but the country also lacked a\nclearly defined debt strategy\u201d.<\/p>\n\n\n\n ERIC\nTENIOLA, A FORMER DIRECTOR AT THE PRESIDENCY STAYS IN LAGOS.<\/p>\n","protected":false},"excerpt":{"rendered":" When General SaniAbacha (1943-1998) took over from Chief Ernest OladeindeAdegunleShonekan on November 17, 1993, he pegged the official rate at N21 to $1US dollar. In the black market it was…<\/p>\n","protected":false},"author":10,"featured_media":14864,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/www.citypeopleonline.com\/wp-content\/uploads\/2017\/04\/Eric-Teniola.jpg?fit=640%2C480&ssl=1","jetpack-related-posts":[{"id":64220,"url":"https:\/\/www.citypeopleonline.com\/the-huge-debt-burden-and-how-we-got-there-3-by-eric-teniola\/","url_meta":{"origin":73444,"position":0},"title":"THE HUGE DEBT BURDEN AND HOW WE GOT THERE (3) BY ERIC TENIOLA","author":"Eric Teniola","date":"November 26, 2018","format":false,"excerpt":"When General Sani Abacha (1943-1998) took over from Chief Ernest Oladeinde Adegunle Shonekan on November 17, 1993, he pegged the official rate at N21 to $1US dollar. In the black market it was running close to N50 per $1US dollar, that is if you can get it to buy. The\u2026","rel":"","context":"In "Opinion"","block_context":{"text":"Opinion","link":"https:\/\/www.citypeopleonline.com\/opinion\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.citypeopleonline.com\/wp-content\/uploads\/2017\/01\/Eric-Teniola-e1484477922608.jpg?fit=400%2C300&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":4155,"url":"https:\/\/www.citypeopleonline.com\/no-plan-devalue-naira-cbn-tells-bdcs\/","url_meta":{"origin":73444,"position":1},"title":"No plan to devalue naira \u2013 CBN tells BDCs","author":"Arinze Ago","date":"January 13, 2017","format":false,"excerpt":"The President, Association of Bureau De Change Operators, Alhaji Aminu Gwadabe, says the Central Bank of Nigeria has told its members that it does not intend to devalue the naira. The CBN also said it would support the local currency at its current levels, especially with a recent rise in\u2026","rel":"","context":"In "Business"","block_context":{"text":"Business","link":"https:\/\/www.citypeopleonline.com\/magazine\/business\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.citypeopleonline.com\/wp-content\/uploads\/2017\/01\/naira-690x450.jpg?fit=690%2C450&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.citypeopleonline.com\/wp-content\/uploads\/2017\/01\/naira-690x450.jpg?fit=690%2C450&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/www.citypeopleonline.com\/wp-content\/uploads\/2017\/01\/naira-690x450.jpg?fit=690%2C450&ssl=1&resize=525%2C300 1.5x"},"classes":[]},{"id":57501,"url":"https:\/\/www.citypeopleonline.com\/nigerias-debt-hits-n22-4trn-in-six-months\/","url_meta":{"origin":73444,"position":2},"title":"Nigeria\u2019s debt hits N22.4trn in six months","author":"Reporter","date":"August 15, 2018","format":false,"excerpt":"The Debt Management Office (DMO) says Nigeria\u2019s total debt rose to N22.4 trillion in the first half of the 2018 financial year. \u00a0 This represents a three percent increase from the N21.68 trillion recorded at end of December 2017. \u00a0 Patience Oniha, director general of the DMO, made the revelation\u2026","rel":"","context":"In "News"","block_context":{"text":"News","link":"https:\/\/www.citypeopleonline.com\/news\/"},"img":{"alt_text":"CBN approves DBN","src":"https:\/\/i0.wp.com\/www.citypeopleonline.com\/wp-content\/uploads\/2017\/03\/CBN-approves-DBN.png?fit=636%2C359&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.citypeopleonline.com\/wp-content\/uploads\/2017\/03\/CBN-approves-DBN.png?fit=636%2C359&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/www.citypeopleonline.com\/wp-content\/uploads\/2017\/03\/CBN-approves-DBN.png?fit=636%2C359&ssl=1&resize=525%2C300 1.5x"},"classes":[]},{"id":11931,"url":"https:\/\/www.citypeopleonline.com\/naira-rises-dollars\/","url_meta":{"origin":73444,"position":3},"title":"Again! Naira Rises Against Dollars","author":"Damilare Salami","date":"March 21, 2017","format":false,"excerpt":"The Naira has continued to appreciate and gain weight against the dollar at the parallel market, newsmen report. The Nigerian currency on Tuesday afternoon traded at N420 (buying rate) and N430 (selling rate), while the Pound Sterling and the Euro closed at N530 and N450 respectively. Trading on the floor\u2026","rel":"","context":"In "Business"","block_context":{"text":"Business","link":"https:\/\/www.citypeopleonline.com\/magazine\/business\/"},"img":{"alt_text":"Naira-Dollars","src":"https:\/\/i0.wp.com\/www.citypeopleonline.com\/wp-content\/uploads\/2016\/12\/dollars-naira-690x450.jpg?fit=690%2C450&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.citypeopleonline.com\/wp-content\/uploads\/2016\/12\/dollars-naira-690x450.jpg?fit=690%2C450&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/www.citypeopleonline.com\/wp-content\/uploads\/2016\/12\/dollars-naira-690x450.jpg?fit=690%2C450&ssl=1&resize=525%2C300 1.5x"},"classes":[]},{"id":55565,"url":"https:\/\/www.citypeopleonline.com\/benue-gov-sam-ortom-on-efcc-list-for-alleged-diversion-of-n22-billion\/","url_meta":{"origin":73444,"position":4},"title":"Benue Gov, Sam Ortom On EFCC List For Alleged Diversion of N22 Billion","author":"Damilare Salami","date":"July 31, 2018","format":false,"excerpt":"The Economic and Financial Crimes Commission (EFCC) is investigating Samuel Ortom, governor of Benue, over the alleged diversion of N22 billion. PUNCH reports that the allegation is contained in the report of an investigation which began in May 2016. Ortom was said to have ordered the withdrawal of N21.3bn from\u2026","rel":"","context":"In "News"","block_context":{"text":"News","link":"https:\/\/www.citypeopleonline.com\/news\/"},"img":{"alt_text":"EFCC, Transparency International,","src":"https:\/\/i0.wp.com\/www.citypeopleonline.com\/wp-content\/uploads\/2017\/04\/EFCC.jpg?fit=600%2C400&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.citypeopleonline.com\/wp-content\/uploads\/2017\/04\/EFCC.jpg?fit=600%2C400&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/www.citypeopleonline.com\/wp-content\/uploads\/2017\/04\/EFCC.jpg?fit=600%2C400&ssl=1&resize=525%2C300 1.5x"},"classes":[]},{"id":12137,"url":"https:\/\/www.citypeopleonline.com\/just-naira-recovers-3901\/","url_meta":{"origin":73444,"position":5},"title":"JUST IN: Naira recovers to 390\/$1","author":"Online Source","date":"March 23, 2017","format":false,"excerpt":"The value of the dollar continued to diminish against the naira as the local currency was traded at N390 to the greenback on Thursday evening in Abuja. NAN reports that the naira had also appreciated against the Euro, exchanging at N400 while remaining stable against the Pound Sterling at N465.\u2026","rel":"","context":"In "Business"","block_context":{"text":"Business","link":"https:\/\/www.citypeopleonline.com\/magazine\/business\/"},"img":{"alt_text":"Naira-Dollars","src":"https:\/\/i0.wp.com\/www.citypeopleonline.com\/wp-content\/uploads\/2016\/12\/dollars-naira-690x450.jpg?fit=690%2C450&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.citypeopleonline.com\/wp-content\/uploads\/2016\/12\/dollars-naira-690x450.jpg?fit=690%2C450&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/www.citypeopleonline.com\/wp-content\/uploads\/2016\/12\/dollars-naira-690x450.jpg?fit=690%2C450&ssl=1&resize=525%2C300 1.5x"},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.citypeopleonline.com\/wp-json\/wp\/v2\/posts\/73444"}],"collection":[{"href":"https:\/\/www.citypeopleonline.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.citypeopleonline.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.citypeopleonline.com\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/www.citypeopleonline.com\/wp-json\/wp\/v2\/comments?post=73444"}],"version-history":[{"count":1,"href":"https:\/\/www.citypeopleonline.com\/wp-json\/wp\/v2\/posts\/73444\/revisions"}],"predecessor-version":[{"id":73493,"href":"https:\/\/www.citypeopleonline.com\/wp-json\/wp\/v2\/posts\/73444\/revisions\/73493"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.citypeopleonline.com\/wp-json\/wp\/v2\/media\/14864"}],"wp:attachment":[{"href":"https:\/\/www.citypeopleonline.com\/wp-json\/wp\/v2\/media?parent=73444"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.citypeopleonline.com\/wp-json\/wp\/v2\/categories?post=73444"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.citypeopleonline.com\/wp-json\/wp\/v2\/tags?post=73444"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}