Curing the curse of oil in Nigeria

May 02, 2005 02:00 AM

In the long list of African countries seen as deserving relief from their crushing debts, there is one that is often ignored: Nigeria.
Donors have too often assumed that Nigeria's role as a leading oil exporter disqualifies it from receiving substantial amounts of aid. Even if it were not for its oil and natural gas reserves, Nigeria's systemic corruption also makes the country seem an unlikely candidate for aid.

On a continent where there are so many deserving cases, and competition for aid, it is easy to pass over Nigeria's claims -- especially when the international oil price is above $ 50 a barrel.
But rather than having been a boon, oil has been a curse for Nigeria, just as it has for many developing nations. The hundreds of billions of dollars that should have gushed from the ground into the government's accounts have been diverted or wasted.

Nigeria, with Africa's largest population of more than 130 mm citizens, remains one of its poorest. Despite its oil windfall, it has managed to amass more than $ 34 bn in overseas debt. It receives only a fraction of the aid that other countries in Africa get, and is ineligible for debt relief under the Highly Indebted Poor Countries programme -- thanks again to its oil.
Those who despair about making progress in Africa have a perfect test case in Nigeria. The surprising thing is that even there -- on some measures the most corrupt country in the world -- there is hope of a turnaround, with a crack-down on corruption and an opening-up of the workings of its government. Even its recent windfall from the hike in oil prices has been saved rather than squandered.

The International Monetary Fund hailed the country's recent efforts as commendable, while the Commission for Africa's report recommended that Nigeria be included in debt relief. Yet Britain is alone among the G7 nations in pushing for Nigeria to receive it.
Nigeria certainly deserves both aid and debt relief. The more help that Africa's largest country receives, the better off the whole continent will be as a result. A healthy, strong Nigeria could be the catalyst for the economic growth the region so badly needs to escape the clutch of poverty.

Much of Nigeria's existing debt is odious -- loans taken by an illegitimate regime, which is unfairly saddled onto the backs of future generations. It should be written off, and money saved to help meet Nigeria's development goals.
To do so would send an important signal: that the international community is prepared to encourage and reward the fragile efforts at reform now taking place in Nigeria.

Source: Guardian Newspapers
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