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African Debt Relief: In Good Company With Germans

Uche Nworah - 5/28/2006

It may seem a bit out of place to be rejoicing over Berlin’s debt grief, but as an African, that is for good reason.

Berlin is the capital of Germany and beneficiary of one of the most expensive rebuilding projects embarked upon by man since the end of the 2nd world war. The much hyped wonderland promised at the collapse of the Berlin wall 17 odd-years ago hasn’t yet materialised, in its place stand empty edifices and structures, idle bulldozers, broken spirits and a mounting debt of over $80 billion, signs of a decaying German economy. Berlin is about to go burst or pleite as Germans would say.

Where better to shop for turnaround ideas than from grand old Africa, a veteran of the broke and bankruptcy game, and who better to apply the African example in Berlin than 61-year old Thilo Sarrazin, the Senator responsible for Finance who has taken Berlin’s case to Germany’s constitutional court in his quest for debt relief. He is arguing that Berlin will no longer be able to service the yearly $3 billion plus interest on the debts and wants a clean break. If Africa could get debt relief, then why not Berlin?

There are several arguments for and against Berlin’s debt pardon. However, relating to the African context, it is good to see that we are not alone, we are indeed in good company.

The tragedy though for Africans is that whereas Berliners could actually point out projects that gulped the loans, Africans can not.

Could this be another angle worth pursuing by state governments and local government authorities in Nigeria? Many of them are still groaning under the huge debt burdens incurred by past regimes, some of these loans were scandalously secured from local banks (now defunct and reclassified as failed banks) whose directors also shared in the loot. For some of these states and local governments, the federal government continues to deduct the loans from source (from their monthly allocations), hence their argument that they don’t have enough money left to invest in capital and capacity building projects that would benefit the people.

Abia state is a case in point; the governor (Orji Uzor Kalu) had at a time taken the state’s case to the Supreme Court challenging the constitutionality of the federal government’s action in deducting accrued loans (from previous governments) from the states monthly allocation.

One would have argued more in favour of the states and local government authorities to seek the same course of action as Berlin, but media reports of their recklessness and corrupt practices actually make such sympathies untenable.

Sadly, such impasse is at the expense of the masses, the presumed prime beneficiaries and targets of any benefits that will arise out of any debt pardon for states and local government authorities. Such an action will also give them a fresh start.

Thilo Sarrazin’s case in Berlin has wide support and seems likely to go in Berlin’s favour when the court delivers its judgement in the summer of 2006. Any surprises? Not really. There is a general understanding that any relief granted will be ultimately passed on to the people by way of improved social services.

Such leadership trust is evidently lacking amongst most of the state governors and local government chairmen in Nigeria. Currently, they are having difficulties justifying their huge monthly allocations and would equally struggle to explain future increases.

There are still yawning gaps in both the morals and leadership skills of the types of leaders that Nigerians continue to be saddled with. Sadly there doesn’t seem to be an end in sight and it may be a long time before our cities will transform into the Berlins, the New Yorks, the Londons and such other destination cities, that may have been built with tax payers and borrowed money.

While Berlin may be taking cues and learning a few lessons from Africa in this instance, Africa and her governments should also pry into Berlin’s affairs for some lessons as well. Berlin offers good examples of social capital projects and how such projects need to be balanced with realistic economic forecasts, in tandem with other economic realities.

While there are no guarantees in life, however the test of a people’s collective will is in the extent of their determination to begin anew. Any journey on a new economic and political direction must be predicated on values, vision and leadership.

Thilo Sarrazin has tried in these trying times to be the face of that new direction for Berlin and Berliners are standing right behind and around him, buoyed by his genuine passion and care for the city and its citizens.

In the African situation, it would be nice to see some new faces, men and women of good intentions and vision. The likes that we can trust our commonwealth with. While we may acknowledge the difficulties of our peculiar context, which makes it difficult for these type of people to win elections, it wouldn’t hurt us still to capitulate to the usual suspects, but who hopefully should be able to recognise their inherent deficiencies, and still be able to concede to talent in the form of reformers needed in major public institutions. In this case, President Olusegun Obasanjo may have scored a pass mark but such a scorecard should serve as a springboard to greater glory and heights.

Africans should hold their heads high, debt afterall may not be such a bad thing as Unoka, Okonkwo’s father in Chinua Achebe’s Things Fall Apart may have us think, but rather it is in what we do with the money we have borrowed that the guilt and shame come in, but being that all that is in the past now especially for Nigeria, we can at least dream on and hope for a better tomorrow in the company of our peers.