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Lagos Historical Review

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The Nigerian private sector initiatives and the management of Nigeria’s external debt, 1980 – 2006

Bose Okuntola

Abstract


This paper examines the Nigerian private sector initiatives and interventions in the management of Nigeria’s external debt between 1980 and 2006. Two immediate fundamental dilemmas faced the Nigerian economy and indeed her commercial environment since the collapse of international prices of crude oil, her major export and foreign exchange earner in 1980. First was the persistent decline in revenue generated to the country with its adverse effects on economic planning and development projects. Second was the spate of internal and external borrowings, which though not a bad idea in a distressed period, became an issue as debt stock mounted and became an impediment to economic growth. By 1982 when the debt problem became a major issue, Nigeria’s external debt stock stood at US$13.1 billion. By 2004, Nigeria’s external debt had risen to US$34 billion with severe negative impact on the country’s overall development. The rising debt and negative impact on the economy elicited intervention from different quarters. One of the most important of these came from the private sector in its organized form in policy advocacy. Although debt negotiations were inter-governmental, the paper argues that the private sector’s initiatives and intervention, through its policy advocacy, networking and representations within the Nigeria’s domestic and external commercial environments were fundamental in the tackling of the debt crisis. The insistence of the business community on integrity, accountability, financial probity on the part of government officials as well as its clamour for government to muster the political will to address the debt problem were clear areas of the sector’s inputs. Its influence on government policy initiatives on debt management eventually paid-off between 1999 and 2006 when government mustered the strong political will for debt relief economic diplomacy with considerable success. The paper concludes that beyond the determination of various governments in tackling the debt crisis, the initiatives and intervention of the private sector contributed tremendously to the activities that led to the debt relief which Nigeria got in 2006.



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