August 28, 2000
US and Nigerian business leaders yesterday welcomed a host of trade and development initiatives that accompanied US President Bill Clinton's visit to Africa's most populous nation, reports the Financial Times (p.2), noting that the initiatives built on Clinton's strong message of support for the fledgling civilian government. But to the disappointment of many Nigerians, Clinton stopped short of offering any special treatment on debt, an issue Nigerian President Olusegun Obasanjo has made a priority in his dealings with foreign lenders.
Also reporting, the Wall Street Journal Europe and Wall Street Journal (p. A13) notes Clinton said major international restructuring of Nigeria's nearly $30 billion in overdue loans would take a "few years"-well beyond the end of his presidency. That didn't satisfy Nigerian President Olusegun Obasanjo, who called the debt a "gushing wound" that would cripple his country's recovery from years of corruption.
Nigeria was hopeful that the US would pressure other developed countries, including Britain and the Netherlands, to ease payment terms on about $21 billion in bilateral debt, but that hasn't happened. Although mired in poverty, Nigeria's oil wealth means it doesn't qualify for a debt write-off program adopted by US and other members of the G7. Private investors hold $3.5 billion in Nigerian paper, and $4 billion from the World Bank and the AfDB.
Meanwhile, US officials made clear that one way to make debt forgiveness happen faster is for Nigeria to help on a matter of pressing concern to the Clinton administration, notes the story: skyrocketing oil prices. Clinton said he urged Obasanjo to do whatever he could to pressure other members of OPEC to increase production to bring crude oil prices, now more than $31 a barrel, down "to somewhere in the mid-20s."
Other members of Clinton's delegation were more direct about the connection between oil prices and debt restructuring. "We've told them to advocate for OPEC to step up production, and that we'll look at debt relief. The two issues are linked because they won't be getting any debt relief if they're getting $32 a barrel," said Spencer Bachus, a Republican congressman who helped put together a foreign-aid package offering $225 million in debt relief that excluded Nigeria. That bill was approved by the House of Representatives and is being negotiated with the Senate.
Obasanjo has twice written Bachus in the last year asking for Congress to appropriate funds to defray his country's debt, notes the story. Nigeria's oil industry is already producing at nearly full capacity, and it is far from OPEC's most influential voice on production questions. Moreover, Obasanjo seemed to indicate that he saw debt cancellation as a precondition to Nigeria's support for lower oil prices. "If I have the option, then I will prefer the cancellation of our debts and a reasonable reduction of the price of crude oil in the world market," he said the day before Clinton's arrival.
Clinton said the US "was prepared to support a substantial reduction" of the multilateral debt. But what's critical, some experts say, is for the US to assist Nigeria with its bilateral loans, many of which were incurred by its military leaders for projects that were never completed. The US wants to wait until Nigeria's democratic government has more of a track record before attempting major debt restructuring. That means the task will be left to Clinton's successor, who is unlikely to be as committed as he is to Africa. Meanwhile, Clinton pressed Nigeria, even as its struggles with corruption and ethnic tensions, to assume a greater role as a stabilizing force in Africa.
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