US embassy cable - 04ABUJA962

UNCLAS ABUJA 000962 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: PGOV, PREL, EFIN, NI 
SUBJECT: OBASANJO OFFERS TO RESIGN IF IT WOULD GAIN DEBT 
RELIEF FOR NIGERIA 
 
 
SENSITIVE BUT UNCLASSIFIED, NOT FOR PUBLICATION ON THE 
INTERNET OR INTRANET. 
 
1. (SBU) SUMMARY:  President Obasanjo celebrated Nigeria's 
"Democracy Day" with two speeches.  An address to the nation 
reiterated platitudes on what his first and second 
administration have done for Nigeria, but the other speech, a 
lecture at the International Conference Center in Abuja gave 
his audience more than they had expected.  Obasanjo declared 
he was ready to resign if that were necessary for the Paris 
Club and other international financial institutions to write 
off Nigeria's foreign debt.  It was so astonishing, and 
wreathed in caveats, that Nigerians paid little attention, 
but his audiences at the Sea Island Summit June 8-10 should 
be prepared for him to raise debt relief with similar depth 
of feeling (although probably not a similar offer).  END 
SUMMARY. 
 
2. (SBU) President Obasanjo last week declared May 29 a 
national holiday, the anniversary of his first inauguration 
as Nigeria's civilian president bringing military rule to a 
close.  It was to be a celebration of his administrations' 
accomplishments, and more broadly of democracy in Nigeria. 
Few paid much attention to either of the two events where he 
spoke, basically being held for his supporters, and there was 
not much to listen to in the address carried nationally. 
 
3. (SBU) At the other, a seminar on democracy at the 
International Conference Center in Abuja, Obasanjo told the 
audience that Nigeria could not sustain paying debt service 
on the 30 billion USD he said Nigeria owes creditor nations. 
For this reason, he said, his administration fighting for 
debt relief and it had become a political rather than 
economic issue.  "The truth is that debt relief, debt 
cancellation, debt whatever, is only a political issue.  It 
is not an economic issue.  We reject it (the debt).  If we 
reject this, we believe that our brothers in the West can 
take a firm position and say in their own countries and 
indeed to the world, that the debt is unpayable and 
unsustainable if we really want to have a world that will be 
regarded as an equitable world." 
 
4. (SBU) Obasanjo reminded the sparse audience that most of 
Nigeria's debts were penalties imposed when previous Nigerian 
military governments had not paid on time or not at all.  The 
original borrowing had basically been paid back already.  "We 
have paid some of these debts two times over; for the 
original 10 billion, 30 billion is being asked. Why?" he 
queried. 
 
5. (SBU) Obasanjo asked why creditor nations canceled the 
debts of Pakistan and Iraq, and then said he would resign if 
someone's downfall was needed to make debt relief happen. 
 
"If the debt of Pakistan can be written off because Pakistan 
and Afghanistan are now U.S. allies, and the debt of Iraq can 
be written off after the downfall of Saddam, we do not want 
the downfall of anybody in Nigeria before you can write off 
the debt.  But if actually a downfall of some sort is needed, 
I will volunteer to step down." 
 
6. (SBU) Obasanjo quickly added that should such need arise, 
he would have to consult the National Assembly first before 
resigning. 
 
7. (SBU) COMMENT:  Debt relief remains a cornerstone of 
Obasanjo's hoped-for legacy, and he will continue to raise 
the issue at every venue, including the upcoming Sea Island 
Summit.  His Finance Minister, Ngozi Okonjo-Iweala, has very 
persuasively talked of waiting six months before re-opening 
discussions on debt relief, in order that Nigeria can provide 
the concrete results from its reform policies necessary for 
any consensus to be reached among Paris Club and other 
creditors.  Obasanjo speaking off the cuff is a bit less 
nuanced, and he reflects a widely held disappointment among 
Nigerians that debt relief has not been among the fruits of 
democracy. 
CAMPBELL