What Help for Friends? Nigeria - Ivory Coast Debt Crisis
by Elizabeth Ohene
It would be the height of naivety not to accept that part of the economic problems that have hit both the Ivory Coast and Nigeria have been caused by mismanagement and a certain amount of corruption. But the regulations for debt rescheduling would have to be done and the performance of the governments watched.Two of the countries in West Africa who proclaim a political philosophy that fit in with western ideologies are currently engaged in debt rescheduling negotiations with Western countries and financial institutions.
Both Nigeria and Ivory Coast have drawn the ire of "progressives and revolutionaries" in the region for what has been seen at least called, ог capitalist and consequently neo-colonialist economic policies.
A team of top Nigerian officials have been meeting with major British exporters and the British Export Credits Guarantee Department and asking for a rescheduling or even refinancing their share of the country's estimated $4bn to $5bn arrears on trade repayments.
Ivory Coast on its part is seeking re-scheduling of its estimated $1.25bn medium-term public external debt repayments which are due this year. Both sets of negotiations started in London in the last days before Christmas and their progress will be watched with more than passing interest, not only by bankers and financiers, but even more keenly by political commentators.
The Ivory Coast especially, has since independence been run by its leader of 23 years Houphouet-Boigny almost entirely along Western drawn text book lines and the presence of many French men in many parts of the economy has meant that Ivory Coast has represented a classic case of a neo-colonialist.
The jibes against Ivory Coast must have been easier to bear because there were visible signs of economic growth in the country. While her neighbours have been ravaged by economic crisis and political upheavals, Ivory Coast has moved from strength to strength.
Some twenty years ago, diplomats posted to Ivory Coast never missed an opportunity to "nip off into Ghana for a bit of shopping and civilisation..." that situation has not only been reversed totally, Ghanaians have thronged to the Ivory Coast in tens of thousands.
The method by which the successes have been achieved would be unappealing to many, the iron grip that President Houphouet-Boigny has had on the country has often meant that individual liberties have not often been respected. And yet when one considers that those countries in the region that are more like economic wastelands have often had even worse human rights records, the temptation is very strong to choose the Ivory Coast lesser of many evils.
The country has in this period moved from being the third largest exporter of Cocoa to being the world's leading exporter of the product, replacing Ghana in the process. The discovery of oil has helped of course, but the important factor has been the sound agricultural basis that the economy has been built on.
Ivorian pineapples, avocados, bananas and other fruits have become famous world-wide and the more 'traditional' products of cocoa and coffee have been increased making the country a most important factor in all international commodity reckonings.
SPECULATION
This success story has suffered a series of setbacks during the past three years culminating in the drought in 1983 and the bush fires that ravaged farms and forests.Now the country faces the maturing of loans that were contracted during the coffee and cocoa booms of the 1970s. The external debt alone is esti- mated at £7bn making the Ivory Coast one of the most heavily indebted nations in per capita terms.
This year, the debt servicing alone is expected to account for about 45 per cent of all export earnings, making the country's economic position a most precarious one.
On the political front, President Houphouet Boigny, even though he has resolutely avoided the question of a successor, is at 78 obviously not the man he used to be and the problem will have to be faced much sooner than later and there is not likely to be an easy solution after 23 years of a deliberate policy of discouraging any talk or speculation of a successor. The prospect of a period of political uncertainty is thus not unlikely either.
AUSTERITY
The Nigerian story has been somewhat different. The growth of that economy has been spectacular to put it only mildly, and it has been thanks almost exclusively to oil and the equally spectacular rise of oil prices in the 1970s.The country was transformed overnight and the scale and speed of the growth has meant many lopsided parts to the economy. A more serious problem has been the fact that planning has never seemed to be a strong point in the make-up of the Nigerian, and the concept of cutting one's coat to suit the material available, has been more often than not treated with total contempt.
Nigerians and foreigners alike who poured into the country seemed to think that there was an inexhaustible source of wealth and behaved as such.
The same way that the spectacular growth of the economy was traceable directly to the spectacular rise in oil prices and a keen demand for oil world-wide, a slack in both demand and prices has had the same spectacular effect on the economy.
It is, however, not easy to roll back on the demands and expectations of the society and in spite of the introduction of austerity measures and the drastic cutback on imports, Nigeria's debt positions are serious enough to keep many international bankers awake for many nights.
The proposals that the Nigerian officials have made mark the first step towards negotiating a comprehensive package with all Nigeria's major suppliers amid leading export credit agencies on repayment of the arrears over an extended period.
It would be the height of naivety not to accept that part of the economic problems that have hit both the Ivory Coast and Nigeria have been caused by mismanagement and a certain amount of corruption.
The negotiations, however, will have to be approached and will be watched on a yardstick different from the performance of the governments.
Far too often the battle for the minds and hearts of Third World countries has been fought, especially by western nations, with empty words and from a defensive position.
It has ceased to be a joke that the United States of America only seems to acknowledge the existence of a country when the first half a dozen Cuban soldiers arrive. Western nations only seem to pay attention to an African country when there has been a 'revolution', executions, violent change of government and the rhetoric of the rulers and state owned media becomes vitriolically shrill against Western democratic meddles and economic philosophies.
An African country that is quietly trying to operate a system that the West claim to be ideal, can and will starve to death if she should rely on help from Western nations whether it be by way of loans or aid or better and softer terms of repayment of loans.
The message cannot be lost on all nations that the two sets of Third World countries that attract the most Western aid are either extreme right wing and repressive regimes or new revolutionary regimes that have violently overthrown moderate governments and claim to be going the "Cuban way".
Somehow unless Cuban soldiers are at your door, you do not qualify for any help from Western nations.
Nobody will expect the United States and other Western nations to pick up the bill for the countries simply because they claim to be trying to emulate a political and economical philosophy preferred by them. No African country will, in fact, care to be drawn into any super power play and to be used as a proxy, but the fact still remains that the super power interest does come when there is a crisis. These are some of the reasons why the debt rescheduling meetings for the Ivory Coast and Nigeria will be watched with keen interest.
Will the West ever put their pockets where their mouths are? Mrs Margaret Thatcher and President Ronald Reagan made speeches in London last year in which they pledged support for Third World nations that choose and respect individual freedoms and democracy as understood in the West.
Such support must be demonstrated in good enough time to convince Third World countries that they are regarded to be worth something in their own right apart from pawns in a super power game.
Respectful consideration for the problems that confront the Ivory Coast and Nigeria now will go a much longer way than any kind of help or aid however massive that will pour in after the present difficulties have developed into full-scale crises.
The unnecessarily tough stance taken by the Western creditor nations and financial institutions against these two countries only go to reinforce the proposition that it pays to be an enemy of the West.
The Eastern bloc at least seems to know how to treat its friends.
