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Third Slavery: Debt Elimination as Moral Imperative of Our Times

Michael Oluwagbemi

Last week, the group of eight most industrialized nations eliminated the debt of eighteen highly indebted countries of the world, owed to world financial development institutions like the World Bank, International Monetary Fund (IMF) and African Development Bank (ADB). The terms of this elimination would reduce the debt owed by these countries (14 in Africa and 4 in Asia) to about 40 billion dollars, freeing up about 1.5 billion dollars spent on debt servicing and interest payment while these countries housed the world poorest people. This would enable the countries offered these aids to meet the various goals of the United Nations Millennium Development Goals to half world poverty by 2020.

However, in the midst of these negotiations, thanks to the leadership of Great Britain- the absence of an American leadership has been conspicuous. Like Climate change, the White House have been reluctant to be actively involved in the moral burden of our age- comfortable in exercising diplomatic oversights, making polemic maneuvers instead of taking responsibility and asserting leadership that the American people are most likely associated with.

The question of debt forgiveness is a moral question of our age. It is not an exaggeration to compare the debt burden of the third world to slavery. It is the modern slavery of our time: in fact, it amounts to a double taxation of the world poorest people, breeding poverty, hopelessness and possibly rapprochement in form of terrorism against the rich countries of the world.

Taking Nigeria (a country that did not qualify for debt relief under the terms of the plan last week) case as a typical example. Most of Nigeria’s debts were assumed under the leadership of dictatorial military regimes that did not spend a tenth of such monies on development programs. Yet under the rules of world bodies that would rather support dictatorial regimes than communist ones during the cold war, Nigeria assumed 17 billion dollars in foreign debt mostly from the Pars club dominated by Britain, Germany and France. Since then, Nigeria has paid 32 billions dollars, yet the miracle of voodoo accounting have made Nigeria still owe about 34 billion dollars. Nigeria spend 2 billion dollars yearly on debt servicing, an item second to none in her budget while education, health and infrastructure projects languish in Africa’s most populous nation of 130 million people.

If the unjust financial scenario painted above is not enough, consider the fact that the so-called Paris club members would collude together to ensure that Nigeria cannot pay off the lower cost debts in her portfolio first or higher interest debts off first – to lower future payments. Rather all payments are bundled together in a plan, and all parties are concurrently involved in negotiation in order for Nigeria not to obtain a favorable deal. As if not all odds are stacked against the country, many Paris Club members involve in various pressure to prolong the terms of these debts, while 75% of such debts are yet unverified by independent parties. In short, it is like owing credit debts on three cards in which the three card companies are forcing you to pay them on an aggregate payment plan negotiated between them without your involvement while you anguish in debt forever. This scenario is unacceptable!

Indeed, the democratic government in Nigeria in consonance with the true spirits of democracy is bound to listen to her people. In addition, many calls especially from the legislative arm have been going on to repudiate the debts of the country. However, before this repudiation I effected, it is necessary to consider the debt question from a moral pyramid.

First as a student of history, we would examine the history of debt elimination and/or reduction. After the world war, Europe and Japan underwent reconstruction. The Marshall Plan was instituted to rebuild and reenergize the western European economies and the Japanese industrial base. Ingrain in these plans were debt elimination, forgiveness and aid- that saw the American taxpayers funding the institutions that produced the world’s most prosperous regional bloc today.

However, Africa was curiously omitted in the Marshall Plan. After losing about half a million lives supporting her colonial masters in the world wars, and leaving northern Africa (one of the theatres of the war) devastated, the Westerner powers packed their interests and properties as they always do (remember Rwanda and Burundi) and left Africa forgotten and rejected. More so, after obtaining cheap and unpaid labor in form of slaves for three hundred years, denying the mother continent of crucial human and economic resources they left her bare. Indeed, after Europe savage colonization of the African soil that saw the extraction of resources worth over 300 trillion dollars in today’s terms, the West perfected the art of looting and leaving.

As if that was not enough, the moment Europe was on her feet, utilizing the tax resources of many colonized countries like Nigeria to rebuild (between 1945 and 1955, Nigeria paid 55 million pounds in taxes to United Kingdom), they handed over the country back fractious, divided and ready to explode. When the explosion took place, indeed the capitalist and communist developed empires were too ready to take sides, sell arms and lend money to despotic leaders!

If the moral picture painted in the above scenarios is not enough to convince anyone of a need for a comprehensive overhaul of the world economic vis a vis debt system as of today, ask yourself the following question. If Africa indeed was one of the theaters of the world wars, does she not deserve equal development plans like Europe and Japan? Do the millions of children that die in African countries deserve less from life than the children of the West that feeds off the free labor of African Ancestors? Do we have a moral obligation to stop the famine, poverty and hopelessness that pervades the African continent today? Would the world stop handing out aid to Africa and instead recommit to the continent as they have done in Europe, Japan and many parts of the world?

In this writer’s opinion, this is the time to stave off disaster. The World told the people of Africa to democratize and that would be the end of their trouble. Indeed, half of African countries operate true democracies with South Africa, Botswana, Nigeria, Ghana, Senegal and Kenya leading the way. These countries between themselves account for about half of Africa’s population. However, if the other undemocratic countries do not see the dividends of democracy in thee countries, what is the hope of good governance in this continent? Would it not be create a much wider problem? Could it not lead to the Middle East situation where religious fanaticism and terrorism feeds the soul of the angry and hungry? There must be reward for good governance, there must be reward for a free market economy, their must be reward for reforms. Debt cancellation, reduction, forgiveness or write-off is the answer to this question. Indeed, the world greatest Nation: the United States of America must not be missing in action, especially as a beneficiary of Africa’s free labor and benevolence of hard labor.

Freeing up Africa’s resources from interest payment and debt servicing which today is more than the aid Africa gets yearly would stop the cycle of lending aiding and external help the continent always gets impromptu. A comprehensive plan of debt reduction or elimination would allow scarce resources for use on education, health; infrastructure and productive sectors of the economy that would save one more soul for the Gipper! Not only is it a humane value to care, indeed it is a Christian value to care for everyone of God’s children!

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