Fuel Subsidy Pallatives and Past Rhetoric on Debt Relief in 2005

Economic Confidential January 2012
Similar promises were made in 2005 over debt relief as the administration of President Goodluck Jonathan has now listed a number of palliatives to cushion the harsh impacts of the fuel subsidy withdrawal on citizens. Some of the palliatives of Jonathan’s team, the Economic Confidential was told, include delivery of mass transit buses, completion and rehabilitation of rail services, refineries, key federal highways, hydro stations, information technology and water.


In addition, the Subsidy Reinvestment and Empowerment Programme (SURE) under which the projects will be executed will also provide for the implementation of short term social welfare programmes to alleviate the impact of subsidy removal on Nigerians especially on health facilities and educational institutions. Nigerians have continued to express fear over the promised palliatives from the implementation of fuel subsidy removal due to similar assurances in the past. Some are even asking where are the benefits of debt relief package of 2005 during the administration of President Olusegun Obasanjo when Nigerians were assured that the saving from the gain would be channelled to improve infrastructural development, social services among others. The Economic Confidential provides here the praises and expectations from what some of our leaders said after the Paris Club of Creditors granted the debt relief to Nigeria in 2005;

“There is nothing like freedom-freedom from debt and the image that the debt relief and exit from Paris Club debt give to Nigeria. The debt relief has brought benefits to Nigerians and that it first represents a direct saving on debt-service repayment, interest, surcharges and other fees. It also improves the country’s worthiness in the global community and builds credible financial confidence for transactions. More investment would start to flow into Nigeria knowing we are no more classified as a bad and doubtful debt country. The debt relief is expected to create jobs and new wealth with new investments, which would translate into improved standard of living”
President Olusegun Obasanjo

“The fact that we have this debt reduction and we will be able to pay-off the balance of whatever is left will leave Nigerians free, to start on a new slate I mean it will be like a second independence, a rebirth, if you will, given us the freedom to focus squarely on our economic activities. It means that generations who would have been paying these debts in future will not have to pay it. And I think that is something that our children will appreciate and thank the President and thank the team and thank every one who has contributed to these all”.  
Dr. Ngozi Okonjo-Iweala, Honourable Minister of Finance
“We did not get debt relief because of compassion. We got debt relief in the first instance because we proved that the money that we get from oil is not enough to cover all our needs, we are now using our money better, we had an economic reforms programme that everyone in the world has lauded and we also showed that we are fighting corruption”
Mallam Nasir El-Rufai, Minister of Federal Capital Teritory

“The debt relief will now provide the Federal Government and the state enough funds to embark on viable development projects with direct bearing on the citizenry. I am totally not in support of the Federal and state governments hence forth going for foreign loans for a project that can never see the light of the day in addition to projects that are not viable or those that cannot bring economic gains” 
GovernorMohammed Danjuma Goje of Gombe State

“It was a reflection of the confidence of the members of the Paris Club in your leadership; in your pronounced determination to rid our country of the cankerworm of corruption and in your commitment to the sustenance of democracy in our country” 
Governor Abdulahi Adamu of Nasarawa State

“This great and singular achievement will reduce the debt servicing burden on the National Treasury, thereby translating into the availability of more financial resources that could be channeled into vital areas such as education, health-care delivery, agriculture, water and power supply.”
Governor Gbenga Daniel of Ogun State

 “The debt relief has brought succour to the economy and I will advise that the funds should be judiciously utilized for the benefit of the citizenry” 
Governor Bukar Abba Ibrahim of Yobe State

“The real gain of $18 billion debt relief granted Nigeria by the Paris Club is the generation of economic activities in the private sector of the country. With this development, Nigeria could now experience new improved and greatly enhanced private capital flow into the country.”
Ambassador Isaac Aluko-Olokun, SSA Nepad (External),

“While we delight at the tremendous goodwill of important global leaders towards our aspiration for an earlier exit from severe indebtedness, we are not unmindful of some persons, who, for their own personal or group strategic interests, would want Nigeria to continue to lumber under the dead-weight of debts” 
Senator Ken Nnamani, President of The Senate

“The debt relief would provide the government the best opportunity to make considerable changes in the lives of the citizens. Also those criticizing the relief terms should beware of the consequences of unwarranted criticism.”
Senator Chief Sunday Fajinmi

“ We need to work out the implications of this debt relief and how it will affect the people we represent and to draw up a marshal plan based on the gains” 
Honourable John Agoda,

“Let’s hope that no government will ever again commit the future generation to such heavy burden of debt”
Gen. Yakubu Gowon (Rtd), Former Head Of State

“Judging from general public’s reaction to news of the debt relief, it is clear that the nation is grateful to you (Mr. President). Now that this relief has come, Mr. President, the Nigerian citizenry are going to be looking forward to improved social services you have already identified”
Omo N’oba Erediauwa, Oba Of Bini

“The $18 billion debt relief, if properly used could translate into massive gains for poverty”
Cardinal Anthony Olubunmi Okogie

“The debt relief granted Nigeria by the Paris Club has been described as an answer to the prayer of saints in the country. If Nigeria as a country can receive debt forgiveness from her creditors, then it means individuals who will live right, God should also expect miracles in their lives as Nigerians”
Rev. Dr. Wilson Badejo, General Overseer Foursquare Gospel Church

Private Sector
“The debt relief package should help the country’s goal of reducing poverty by making available some one billion dollars of debt service payment for improvement in social services including health and education. The comprehensive debt treatment, if fully i
mplemented, has significant implications for debt sustainability, ongoing economic reforms and poverty reduction efforts, as well as removing the debt overhang, which has created uncertainty for private sector investment in the country”
Engr. Mansur Ahmed, Dg, Nigerian Economic Summit Group (Nesg)

“Let me tell you the debt relief is one of the best things that have happened to this country. If we are able to clean up, then we will not be spending too much of our income to service the debt. If we spend about 60 per cent of our budget money for health and welfare then we have a healthy citizenry. I think that any government that is worth the salt must show that the health of the people, the education, security must be given priority.”
Dr. Sonny Folorunso Kuku, Partner, Eko Hospital & Eko Hotels

“The benefits of this singular act, particularly with regards to the development of the economy are immense. Our nation, Nigeria is at last credit worthy. This is probably the greatest dividend of democracy for all Nigerians.”
Dr. Cecilia Ibru, Md Oceanic Bank Plc

Labour and Professional Bodies
The struggle for debt cancellation has created a national movement involving diverse sections of the Nigerian polity such as the House of Representatives, NLC and the civil society. Congress calls on Nigerians to sustain the spirit and vigour of this movement, to enable it influence and oversee the direction to which the accruing savings is deployed”
Comrade Adams Oshiomhole, Nlc President

“The feat had justified President Olusegun Obasanjo’s choice of Dr. Ngozi Okonjo-Iweala as live wire of his economic team. She is an epitome of empowerment and advancement and having been given the right opportunity at the right time, she utilized it to the glory of God and the joy and pride of womanhood and Nigeria ”
Dr. Elizabeth Bolere, President National Council Of Women’s Societies (Ncws)

“The consumers of this country are very excited at the thought that this debt forgiveness could mean improved lifestyle for the average Nigerian. We believe that our president’s sincere and ultimate desire to make the country a better place will soon come true and therefore, we urge all Nigerians to support all programmes geared towards re-vamping the economy. The government should use the money that would have been used to service the debt to tackle the critical problems of the country.”
Mr. Cordel Okafor, President, Consumer Rights Advocacy League (Cral)

Public Commentators
“What Obasanjo, Okonjo-Iweala, have achieved by this debt deal will be a lasting legacy. Yes, I believe we should be committed to getting out of the debt trap.”
Chijama Ogbu,

“With the ray of hope offered by the Paris Club in respect of the recent announced debt relief of about $18 billion, this good gesture should be utilized as a platform for poverty alleviation and economic development. If Nigeria is prepared to put its acts together to utilize the rare window of opportunity opened by the Paris Club, this might become a springboard for poverty eradication and economic development”
Joseph Omowa,

“We need to appreciate President Olusegun Obasanjo on this. But I want to beg him that he should try his best to ensure that Nigeria is rid of of poverty.
Adesoji Olugbenga,
“The deal will help to change the lives of millions of people in Nigeria . It will mean more schools, more teachers and better health services for a country which has the biggest population in Africa . The deal is major step in bringing about a better future for a country in which seven million children receive no schooling at all and one in five dies before their fifth birthday” 
Right Honourable Hilary Benn, International Development Secretary – Uk
“Given the developments with the Paris Club and high oil prices, investors are looking more favourably at Nigeria” 
Marc Balston, Debt Strategist Deutsche Bank, London


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