Thursday, August 11, 2005

Debt relief: Stakeholders demand 50% for ICT

Features:
The recent debt relief granted the nation is a welcome development, but experts are advocating for a certain percentage saved to be set aside for backbone development of Information and Communications Technology (ICT), reports REMMY NWEKE.

UNITIL Thursday, June 30, this year, Nigeria was still owing the Paris Club of creditors about $30 billion despite the servicing of the debt over the years stretching in excess of a decade.

It came as good news to every Nigerian that the Paris Club has shifted its stand after persistent pressure from the current government and precisely the Finance Minister, Dr. (Mrs) Ngozi Okonjo-Iweala, among other stakeholders.

Announcing the development in Abuja, the finance minister noted that after its recent meeting on Wednesday, June 29, 2005, the creditors agreed to give Nigeria debt relief, and this action is appreciated.

According to the official website of the Presidential Research and Communications Unit (PRCU) ‘www.nigeriafirst.org’, Mrs. Okonjo-Iweala, was quoted as saying the gesture was wonderful.

“It gives us a chance to start on a clean slate without the heavy baggage of debt undermining our development” she acknowledged, noting however that it was an outcome of a long, hard battle Mr. President initiated in April 1999 after his election. This, she said, was intensified with the President’s appointment of an economic team led by the Minister of Finance to oversee the economic reform process. The implementation of the economic reform programme provided the strong anchor for the renewed efforts of the government to persuade the creditors to listen to the nation’s case for debt relief, hence representing a historic achievement.

However, the terms of agreement with the Paris Club, the minister disclosed include that the nation would clear arrears of about $6 billion on its $30 billion Paris Club debt, following which there would be a stock reduction on Naples terms and a buy-back of the remainder in order to provide an exit from the Paris Club.

Nigeria is reportedly owing the rest of the world estimated total of $35bn, out of which $30 is owed the 19-nation member Paris Club, despite not receiving any loan since 1992.

She explained that the entire new package is such that the nation expects debt relief of about 60 per cent on the current Paris Club debt, and is expected to pay off the balance of about 40 per cent through a buy-back operation.

In addition, this attempt represents a write-off of close to $18 billion for Nigeria, which compares favourably with the $40 billion write-off for 18 low-income heavily indebted countries out of which 14 are Africans.

“We appreciate the efforts of all internal and external actors who joined hands with us to make this a reality. We particularly want to appreciate the efforts of the National Assembly and various national and international NGOs, student groups, multilateral institutions and of course the media,” she asserted.

The highlights of the agreement, Mrs. Okonjo-Iweala said, comprises that Paris Club recognizes Nigeria’s implementation of its home-grown reform programme under the International Monetary Fund (IMF) intensified surveillance as a legitimate instrument that fulfills the requirements for debt relief.

She said the achievement would now be summarized in a new instrument modeled on Nigeria, known as Policy Support Instrument (PSI) and based on the National Economic Empowerment and Development Strategy (NEEDS), which is a home grown programme, even as they have been invited to conduct detailed negotiations and finalize a Memorandum of Understanding (MoU) with the Paris Club next month, September.

Throwing more light on the relief, the minister said the reclassification of the nation into an International Development Association (IDA) only status; which allowed Nigeria to be eligible for consideration for Naples terms, that is, the more generous debt relief package reserved only for lower income countries that show good performance on reforms.

Also, the eligibility was based on the need to invest in education, health, agriculture, water and power, of which all are related to the Millennium Development Goals (MDGs), and working in alliance with the likes of the World Bank and IMF, Nigeria reportedly argued its case successfully for the use of debt service funds to enable it invest in these important areas, which are critical to the well being of the nation.

The minister further said that as a result, beginning from next year’s budget, an additional $1 billion will be invested in aforementioned areas, revealing that a system to track MDG-related expenditure and link it to results on the ground has been developed and the President has inaugurated a commission chaired by him to monitor it quarterly.

On the other hand, Information and Communications Technology (ICT) experts reacted to this development, canvassing for reinvesting of about 50 per cent of the total $18 billion, about N2,446,289,978,027.33, to be saved thereof, should be strictly devoted to the infrastructural development of the nation in power and information technology.

Leading the campaign, the immediate past president of the Information Technology (Industry) Association of Nigeria (ITAN) and chairman, Connect Technologies Limited, Mr. Chris Uwaje, advised President Olusegun Obasanjo to reinvest 50 per cent of the secured debt relief gains into power/energy infrastructure and Information Technology (IT).

He described these sectors as core engines that would drive and sustain the economic development and wealth creation agenda. Stressing this has become imperative given the new vision of the National Information Technology Development Agency (NITDA) led by its newly appointed Director-General, Prof. Cleopas Officer Angaye.

Mr. Uwaje who also is the chairman, events and trade services committee at the Nigeria Computer Society (NCS), said, the new vision tends toward establishing formidable Information Technology foundation in the polity.

“This also presupposes that NITDA needs a robust operational structure for the attainment of the estimated net-in target,” he asserted. Noting that the vision needed resources to fortify and sustain the implementation processes, just as he observed IT represents and remained the last hope of the continent to regain her lost glory in the evolution of human civilization.

Therefore, Nigeria being central to this solution, must embrace IT holistically via implementations. Warning, though, that missions and visions of the African Union (AU), New Partnership for Africa’s Development (NEPAD), NEEDS and its state’s counterparts, SEEDS may not succeed without IT knowledge base empowered by political will and legislative mechanism.

Chief executive of Kontemporary Komputers Ltd, Abuja, and current National Vice President ITAN, Mr. Jimson Olufuye, while acknowledging the relief as a good thing for the nation’s socio-economic development, said that definitely a good percentage of about 50 per cent of the savings should be devoted in IT infrastructure and the computerisation of Nigerian primary and secondary schools.

United Kingdom based consultant in telecommunications technologies, Prof. Augustine Odinma, affirmed that the debt relief, was a good achievement by the government, but is worried on how this savings would be spent beyond allocation.

“My concern is how the savings are spent. Yes, ICT is one area that would be very essential not only in bridging the digital divide, but that of bridging the poverty line, which the NEPAD initiative is supposed to eradicate.

The visiting professor of several universities both in the UK and United States as well as Nigeria, said “IT is closer to the people, irrespective of where the people are, it would lead to effective access into the information superhighway, which is inevitable for effective research for our university lecturers and students.”

He also benchmarked research as the mother of all developments and Nigerian students are the future of the nation, therefore, “the only thing that could enhance the empowerment of our young people in an unprecedented way is ICT and so a major chunk of the savings should go into ICT infrastructural development”.

He maintained that in order to achieve any meaningful ICT initiative that will touch many, backbone problem must be addressed, even as he enjoined the government to make backbone its priority on how to spend the gains of the relief.

According to him, since IT would transform the lives of many in an unprecedented way, it would be money well spent if about half the amount goes into ICT, which he concurred with Mr. Uwaje would then be money indirectly used to support the government NEEDS and NEPAD initiatives as well as the MDGs.

For the President, Nigerian IT Professionals in the Americas (NITPA) and Vice President, AfriHub Inc of United States, Prof. Manny Aniebonam, the relief is a welcome development for all Nigerians for the fact that it should not have been accumulated in the first place and blamed it on excessive spending and abuse in the past, as well as on draconian policies and dependency on foreign human resources.

He lauded government for achieving this far and realizing that capacity building is the key to future development, he also warned that spending millions of dollars a month on sourcing foreign specialized skills will lead to more debt in the future.

“The nation would gain more if such investment is made, with such percentage and annual savings directed at mandatory IT training for all university and polytechnic students in the nation’s tertiary institutions,” he declared, pointing out that without fundamental education in IT, the nation may continue in a spiral of debt and seeking of more forgiveness in the future.

Prof. Aniebonam also said that when this vote is eventually approved, “it should be utilised in building the national telecommunications backbone, training of both students, teachers, rural women and development of the power supply system.

Although ICT was not specifically listed in the core sectors to benefit from the relief largesse, it is important that as we develop the power sector, ICT backbone as suggested by experts should be made the basis for the utilization of the fund, so as to be able to empower rural dwellers especially women and children.

This is because any mistake in leaving out this area would further take the nation backward rather than forward, whereas all the enlisted sectors are quite relevant too.

Analysts are keenly watching to see how the government would take this option in spite of its vowed commitment to the ICT industry, even though there are fears that the political class would still mismanage the fund if care is not taken.

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