Former President Olusegun Obasanjo has revealed the intricate steps he took to secure a monumental debt relief deal for Nigeria during his tenure from 1999 to 2007, which saw the nation’s $36 billion external debt drastically reduced.
Speaking at an event, the former president detailed his administration’s efforts to alleviate Nigeria’s crushing debt burden, which at the time was costing the country $3.5 billion annually in debt servicing, while the national reserves were at a mere $3.7 billion.
“When I became elected President of Nigeria, one of the things that worried me and that I wanted to do something about was debt relief. The quantum of debt that we were carrying, the burden was too heavy. We were spending $3.5 billion to service debt, yet the quantum was not going down,” Obasanjo stated, outlining the grim financial state he inherited.
Determined to find a solution, Obasanjo embarked on a mission to convince international lenders, including the World Bank and Paris Club, that Nigeria deserved debt relief. He emphasized that presenting a credible and transparent plan for economic reforms was key to gaining the trust of global financial institutions.
“Many people inside and outside Nigeria thought it was a bad dream, but I was convinced. I went to the World Bank and I started talking to our creditors,” he explained.
Obasanjo highlighted that one of the most significant challenges he encountered was the global perception of Nigeria’s past mismanagement of loans.
“The world lenders did not feel that they owe us. But when you make your case, if they find that you are genuinely showing and trying to carry out reforms, they will listen,” he said, noting that these reforms included reducing corruption, improving public service delivery, and better financial management.
To prove his administration’s commitment to transparency and fighting corruption, Obasanjo established the Independent Corrupt Practices and Other Related Offences Commission (ICPC) and the Economic and Financial Crimes Commission (EFCC).
“One of the first bills I sent to the National Assembly was the ICPC bill to fight corruption. I followed that up later with the EFCC bill, again to fight corruption because the international community knows what you’re doing,” Obasanjo explained.
Reflecting on the misuse of loans before his administration, Obasanjo cited an example of a state project where funds intended for a carpet production facility were fully spent, but no work had been done.
“A small print [in the loan agreement] said once you sign, how the money is spent is not the responsibility of the lender, it’s the responsibility of the borrower,” he said, illustrating the poor financial practices that had tarnished Nigeria’s reputation with lenders.
Despite the difficulties, Obasanjo’s efforts paid off after nearly six years of negotiations, culminating in substantial debt relief.
“I gave them assurance that the money saved from our debt relief would be spent on sustainable development goals,” he said, noting that the funds freed from debt servicing were redirected to vital developmental projects across the country.
Obasanjo also underscored the importance of responsible leadership in securing and maintaining international trust.
“The world out there doesn’t feel that it owes you anything, but if you do what is right, there’s a lot you can get out of the world,” he emphasized.
However, the former president expressed disappointment with subsequent administrations, criticizing their failure to build on the progress made during his tenure.
“When I left in 2007, the reserves were at $45 billion, and we had about $25 billion in the excess crude account, totaling around $70 billion. Today, all that money is gone, and we owe more than we did when I came to government in 1999,” Obasanjo lamented, pointing to poor leadership, mismanagement, and rampant corruption as the reasons for Nigeria’s current economic challenges.
“Leadership is not something you pick on the road, and not everybody is given to it. When we identify leadership, we should appreciate it and use it to good advantage,” Obasanjo advised.
He expressed frustration over Nigeria’s inconsistent progress, stating, “We take two steps forward, one sideways, and two or three backward.”
The former president concluded by stressing the importance of planning and preparation in leadership.
“What do you say of a Nigerian president who came to office without a plan? And then he woke up and just said three-point plans. What are the plans, what are they going to achieve?” Obasanjo questioned, pointing to the need for thorough planning and genuine leadership to steer the country toward sustainable growth.