Nigeria’s first loan from the Paris Club – a $13.1 million fund – was taken from the Italian government in 1964 for the building of the Niger dam.
The nation’s borrowing from foreign lenders continued but was deemed generally insignificant until the oil boom of 1971-1981 which brought about “big borrowing.” When oil prices crashed in 1982, Nigeria was unable to pay off the loans it borrowed.
With the spike in interest payments and penalties, the debt became a financial crisis. This continued through the military regimes till the return to civilian rule in 1999 when President Olusegun Obasanjo embarked on the debt relief campaign.
Nigeria’s debt, as of December 2004 stood at $36 billion which equals N 4.82 trillion using the official exchange rate of N134 to US$1.00 at the time.
On June 29, 2005, the debt relief efforts yielded results when the Paris Club and Nigeria agreed on a US$18 billion debt relief package.
Recently, a viral image showing Atiku Abubakar, the presidential candidate of the Peoples Democratic Party (PDP), had the claim that Mr Abubakar who was Vice President at the time, led the Economic Management Team (EMT) that paid off Nigeria’s debt.
This campaign effort to show off Mr Abubakar’s achievement has sparked several debates for and against the claim.
What exactly is an Economic Management Team?
An Economic Management Team (EMT) is a team of experts that manage the resources, finance, income and expenditure of a country and advise the President on economic policy matters.
Currently, Nigeria’s EMT is being chaired by the Vice President with the Minister of Finance, Minister of Budget and National Planning, Minister of State for Budget and National Planning, Minister of Industry, Trade and Investment, Minister of Agriculture, Minister of Information and Culture, Governor of the Central Bank, Special Adviser to the President on Economic Matters, Director-General of the Budget Office, Director-General of the Debt Management Office, and Director-General of the National Bureau of Statistics as members.
Was this the same situation during the period Mr Abubakar was Vice President?
What does the Nigerian constitution state?
The Economic Management Team which appears as the Economic Management Council is listed as a Federal Executive body by the Nigerian constitution. This council is chaired by the Vice-President.
In an article by Punch, Mr Abubakar said he assembled the economic team and in another article by the Guardian, he said he was the leader of the economic team.
While the constitution recognises Mr Abubakar as the chair of the economic council, research shows that Ngozi Okonjo-Iweala who is currently the Director General of the World Trade Organisation (WTO), led the EMT that cleared Nigeria’s Paris Club debt.
According to her biography on the WTO’s website, Mrs Okonjo-Iweala who served as Minister of Finance twice (from 2003-2006 and 2011-2015), spearheaded negotiations with the Paris Club Creditors.
“As Minister of Finance in Nigeria, she spearheaded negotiations with the Paris Club of Creditors that led to the wiping out of $30 billion of Nigeria’s debt, including the outright cancellation of $18 billion,” part of the biography reads.
This report also noted Mrs Okonjo-Iweala led the economic team of President Olusegun Obasanjo.
According to the Debt Management Office (DMO) document on “Nigeria’s debt relief deal with the Paris Club,” the relief was achieved through the collective efforts of the President, the Ministry of Finance, the National Assembly, the DMO, the EMT, and other stakeholders.
To say the Vice President was the chairman or head of the Economic Team/Council is correct but to say he led the conversation that led to the debt removal could be misleading.