EXTERNAL DEBT AND CRISIS OF DEVELOPMENT IN AFRICA: NIGERIAN EXPERIENCE 1999-2007
The study sets out to interrogate the relationships between external debt and crisis of development in Africa within the period 1999-2007 in Nigeria. The aim of the research was to provide a framework that explains the effect of external debt on national development. The theory of post colonial state was adopted as the analytical framework to demonstrate that Nigeria has followed a developmental strategy dictated by the interest of the imperialists and their local allies among the indigenous population. The method of data collection used was the secondary sources of data. Three hypothesis tested were: there is no relationship between debt servicing and shortage of electronic voting machines in Nigeria; debt relief tends to have no effect on the rate of unemployment in Nigeria, and, debt rescheduling tend to deepen external dependence of Nigeria.The findings of the study revealed that there’s no relationship between debt servicing and shortage of electronic voting machine in Nigeria in the 2007 election. Against the background of the national economic crisis, the study recommends that the international economic system should be restructured and unequal term of trade balance with fair economic trade relations so as to encourage enhance foreign exchange for national development.
Anyone who observes the condition of Africa , comes up with so much confusion and perplexity. The average per capital national income in Africa is one-third lower than that of the world’s next poorest region, South Asia. Most African countries have lower per capita income now than they had in 1980 or in some cases in 1960. Half of Africa 888 million people live on less than US $1 a day.
African entire economic output is not more than $420 billion, just 1.3 per cent of the world’s gross domestic product, less than a country like Mexico. African share of world’s trade has declined to less than half of what it was in the 1980s, amounting to only 1.6 per cent ; its share of global investment is less than 1 per cent. It is the only region where school enrollment is fallen and where illiteracy is still common place. (Meredith,2005:682)
It was expected that Africa would become the giant of other regions at least going by its human cum natural resources. But unfortunately, reverse is the case. After independence African leaders shifted the responsibilities of their development to other imperialist nations and consequently sought and acquired external finance for development projects. (Ake,2001: 18) According to Fasipe (1990:1), “progress in the world is characterized and helped by interdependence of ideas and men, goods and capital”. (Madavo 2003:91) stated that borrowing and therefore debt is neither an aberration nor peculiar to African countries. It is, in fact a legitimate part of everyday economic management. Hence most of the rich countries in the world today relied heavily on external finance to attain their present economic height.
Post second World War Europe especially Germany was reconstructed and rehabilitated through external borrowing under the aegis of the Marshal plan (ogbenovo,2005:2). African nations after the traumatic effect of colonialism resorted to external credit, this was expected among other things to be used to develop their economies and provide the social-economic needs of their citizenry.Unfortunately, this resort to external borrowing turned out to be the Westphalia treaty that settled nothing. This is not unconnected with their weak economic base, unfavourable terms attached to he loans, policy errors and mismanagement among others. Furthermore, the post colonial African states of which Nigeria is among, became unable to repay their debt and thus got entangled in the web of debt crises that bedeviled their socio-economic development.
Africa’s debt crises attracted global attention during the last quarter of 1982, series of prescription to get the continent out of its economic doldrums have been offered. Prominent among them is the restructuring of African economy in line with IMF-dictated reforms of deregulation, privatization and liberalization (Obaseki and Bello,1995:241). However, many debtor countries and their sympathizers prefer debt cancellation to release fund for the development and welfare of the countries of Africa since they were overburdened by excruciating debt service obligation. Nigeria for instance, prior to 2006 was expending US$2 billion annually on debt servicing which was nine times the annual health budget (Okonjo –Iweala et al,2003:8)
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