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Moss served as Deputy Assistant Secretary in the Bureau of African Affairs at the U.S. Department of State 2007-2008 while on leave from CGD. Previously, he has been a Lecturer at the London School of Economics (LSE) and worked at the World Bank, the Economist Intelligence Unit (EIU) and the Overseas Development Council. Moss is the author of numerous articles and books, including African Development: Making Sense of the Issues and Actors (2011) and Oil to Cash: Fighting the Resource Curse with Cash Transfers (2015). He holds a PhD from the University of London’s SOAS and a BA from Tufts University.
“An Aid-Institutions Paradox? Aid dependency and state building in sub-Saharan Africa,” with Nicolas van de Walle and Gunilla Pettersson, in William Easterly (ed.) Reinventing Aid, MIT Press, Cambridge, 2008.
“The Ghost of 0.7%: Origins and Relevance of the International Aid Target,” with Michael Clemens, International Journal of Development Issues, Vol. 6, No. 1, 2007.
“Compassionate Conservatives of Conservative Compassionates? US political parties and bilateral foreign assistance to Africa”, with Markus Goldstein, Journal of Development Studies, Vol. 24, No. 1, October 2005.
“Is Africa’s Skepticism of Foreign Capital Justified? Preliminary Evidence from Firm Survey Data in East Africa”, with Vijaya Ramachandran and Manju Kedia Shah, in Magnus Blomstrom, Edward Graham, and Theodore Moran (eds), Does a Foreign Direct Investment Promote Development?, Institute of International Economics, Washington DC, May 2005.
“Irrational Exuberance or Financial Foresight? The Political Logic of Stock Markets in Africa”, in Sam Mensah & Todd Moss (eds), African Emerging Markets: Contemporary Issues, Volume II, African Capital Markets Forum, Accra, 2004.
“Stock Markets in Africa: Emerging Lions or White Elephants?” with Charles Kenny, World Development, Vol. 26, No. 5, May 1998.
“Africa Policy Adrift,” with David Gordon, Mediterranean Quarterly, Vol. 7, No. 3, Summer 1996.
“US Policy and Democratisation in Africa: The Limits of Liberal Universalism,” The Journal of Modern African Studies, Vol. 33, No. 2, June 1995.
The British proposal to create an International Finance Facility in order to 'frontload' $50 billion in aid per year until 2015 has generated a lot of attention and will likely be a major topic at the G8 meeting this July. But the IFF has also been shrouded in confusion and misconceptions. This paper explains the IFF proposal and highlights some of the common misunderstandings surrounding it, including the mechanics of the scheme itself, the potential for a U.S. role, and the expectations of aid which underlie the IFF’s premise. The UK deserves plaudits for elevating global poverty on the international agenda and for seeking ways to better harness the power of private capital markets for development. But the IFF, as currently conceived, is an idea that merits more scrutiny and a healthy dose of skepticism.
Debt relief and African poverty are firmly on this year’s global agenda, most recently from the Tony Blair-sponsored Africa Commission. But little attention is going to the big elephant in the room: Nigeria.
Even with its oil wealth, Nigeria’s debt burden is enormous given its huge population of 130 million and its extreme poverty—average income is just $330 per year. Increasingly vital to Western energy security, Nigeria is also a worrying source of transnational security threats, including Islamic radicalism, disease, drug trafficking, and international crime.
President Olusegun Obasanjo inherited huge debts when he came to power in democratic elections in 1999 ending fifteen years of military kleptocracy. Two-thirds of this debt, now estimated at $33 billion, is owed to the governments of Britain, France, Germany, and Japan. In the last year, Nigeria’s newly reform-minded leadership has used the recent high oil price to build reserves, “saving” more than $5 billion of its oil income.
What now makes sense is a new kind of debt deal between Nigeria and a handful of creditors, who also all happen to be G-8 members that have pledged to make African debt a top priority this year: Nigeria ought to offer to buy back its debt at a heavy discount. Its official creditors ought to swallow hard and agree.
Most of Africa has already received favorable debt treatment from the Paris Club of creditors, typically a two-thirds stock reduction on ‘Naples terms.’ Twenty-three African countries have also benefited from the multilateral heavily indebted poor countries (HIPC) initiative. But Nigeria has been denied traditional Naples terms on a technicality related to its classification within the World Bank— no doubt due in part to the size of its debt, its oil wealth, and its reputation for corruption. Now there is an opportunity for Nigeria and its creditors to exploit the new Paris Club option of case-by-case ‘Evian terms’ introduced last year to reduce Iraqi debt.
What kind of discount on Nigeria’s debt makes sense? A reasonable opening offer from creditors would be 33 cents on the dollar, or what Nigeria would already have gotten from had it been treated like any other low-income country. The Nigerians might plausibly argue for a rate of 13-15 cents. This is our best estimate of the value of Nigeria’s debt after stripping out all interest, penalties, arrears, and export credit defaults accumulated by military dictatorships between 1984 and 1999. Perhaps both sides can agree on something within this range, similar to the 20 cent deal Iraq received or the 25 cent offer for commercial creditors currently on the table from Argentina.
For Nigeria, the discounted buyback would be a backdoor way of getting irrevocable debt relief on Naples terms or better. It would also lock-in the fiscal boost of its recent oil windfall, eliminating the political pressure to spend the money unwisely.
For the creditors, a deal implies some return on debt that is largely uncollectible at a rate near or even above its actual value (internal treasury valuations are likely in the 15-20cent range). The creditors would earn plaudits for helping a country with more than 100 million people living below the poverty line. They would also be supporting a fragile democracy and finally recognizing Obasanjo’s leadership on peacekeeping, conflict resolution, and his personal intervention to help end the political crises in Liberia and Togo.
Most significantly, resolving the debt problem would be a big boost to reformers within the Nigerian government. Obasanjo and his new economic team have recently put in place an ambitious campaign to promote non-oil growth, fight corruption, and reduce poverty. But they face stiff resistance from entrenched powers and the debt itself has become one of the major complicating points with parliament, threatening to derail the entire reform effort. (Indeed, earlier this month Nigeria’s lower house voted to repudiate the country’s debt obligations.) A favorable debt deal soon could help to tip the balance in the reformists favor, while failure could undermine them and waste a crucial opportunity to get Nigeria back on track.
Just as reducing Iraq’s debt was in the West’s own interest and a critical step in helping that country recover, so too for Nigeria. A discounted debt buyback may be the easiest, most affordable, and most practical approach to resolving the debt problem in Africa’s most pivotal country.
European donors like to think they are the ones pushing the envelope in development policy. Many have recently promised huge increases in aid and enthusiastically embraced ideas such as donor pooling.
Into this mix comes one of the bolder ideas for financing development, the British proposal to create an International Finance Facility. But the IFF, which has yet to be launched, is already going in a worrying direction by focusing on quantity rather than quality. As a result, instead of radically remaking the international aid system, the IFF could wind up merely reinforcing some of the reasons aid works so poorly.
The IMF announced today that it has completed its review of Nigeria’s policy support instrument (PSI). The Fund was laudatory, including a quote from first deputy MD Anne Krueger:
“Looking ahead, the authorities are committed to continue the ambitious macroeconomic and structural policies to entrench macroeconomic stability, strengthen public financial management, and reduce the costs of doing business further”
The PSI review is the final bureaucratic hurdle for the country to complete the Paris Club discounted buyback deal agreed last October. The first ever of its kind, the debt deal includes an $18 billion write-off and will reduce the country’s overall debt load by more than 80%. The country can now make its final payment later this month and clean up the books with all of its major bilateral creditors.
Of course, the big question is what happens next? As the Fund notes, the country has made great strides and the reform effort seems on track. But the reforms remain highly vulnerable to political changes and with trouble stirring in the Niger Delta and President Obasanjo considering a third term, the chances of unrest seem to be going up. These are the risks of debt relief in a place like Nigeria where success is far from the most likely outcome. But given the importance of the country and the downside of failure, the debt deal still looks like a bargain for the major powers--and a boost to the reformers trying to lock in their gains.
Today began the 2nd annual Clinton Global Initiative in New York, the annual “ideas fest” sponsored by the former President and brining together a massive list of opinion-makers, business and political leaders, and of course plenty o’celebrities. As one of the staff explained, the CGI “brings together 1,000 of President’s Clinton’s closest friends to find solutions to the world’s most pressing problems”. The focus this year is on poverty, climate change, global health, and mitigating religious conflict--the last topic certainly the most timely. The idea of the CGI is also to solicit “commitments” from individuals and groups about what they promise to do to address one of these four problems, complete with grand signing ceremonies. Although much of the real attention is on networking among the eclectic (but clearly Clintonite) crowd, I drew two themes of note from the early discussions at the poverty track:
Growth? Unlike most of the policy discussions in Washington (and Tunis - where I recently visited to present a new CGD report on the future of the African Development Bank) about reducing poverty, there was almost no talk of raising economic growth in the poorest countries. Instead, everybody seemed focused on micro-project interventions; particularly sexy is anything in microfinance (yes, still) or involving new technology. (Even the atmosphere, where there are large plasma screens almost everywhere you look and young people tapping on laptops in every nook of the hotel, oozes techophilia).
Trade is dead. Bob Rubin in particular was gloomy that the politics of trade in the rich world, and the US in particular, are getting much much worse. Just as bad, there did not seem to be any sense that people, many of whom are clearly gearing up for the 2008 election, were going to try to put trade back on the agenda. (At the same time, there seemed little recognition that it is mostly Dems who are against renewing fast-track authority, not Bush & Co.)
It is my first such event, and it is a complete zoo, but one where the energy of the participants is clearly palpable. Whether any concrete ideas or projects will emerge from the chaos is anyone's guess, but in some ways it is beside the point: clearly the CGI is mostly an eclectic networking event. My table yesterday which seemed a fair representative sample of the crowd) included a hi-tech entrepreneur from Argentina, an American businessman who builds malls in China, the head of a large microfinance NGO, a retired CEO, a perky college student, and Michael Douglas. I am usually a grumpy cynic when it comes to these kinds of things, but I have to admit the enthusiasm of the Clintonite crowd is infectious: Where else can I bump into Shimon Peres in the lobby and Richard Branson in the elevator?
For over a decade, Boko Haram has waged a campaign of terror across northeastern Nigeria. In 2014, the kidnapping of 276 girls in Chibok shocked the world, giving rise to the #BringBackOurGirls movement. Yet Boko Haram’s campaign of violence against women and girls goes far beyond the Chibok abductions. From its inception, the group has systematically exploited women to advance its aims. Perhaps more disturbing still, some Nigerian women have chosen to become active supporters of the group, even sacrificing their lives as suicide bombers. These events cannot be understood without first acknowledging the long-running marginalization of women in Nigerian society. Having conducted extensive fieldwork throughout the region, Matfess provides a vivid and thought-provoking account of Boko Haram’s impact on the lives of Nigerian women, as well as the wider social and political context that fuels the group’s violence.