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Nigerian leader says he may reject IMF loan

October 7, 1985 GMT

LAGOS, Nigeria (AP) _ Nigeria’s military leader said Monday he need help with the foreign debt, but will not accept a pivotal International Monetary Fund loan if the people reject its harsh terms. Experts say the economy will collapse without it.

Maj. Gen. Ibrahim Babangida also made clear that he hopes his government’s improved relationship with the United States will win Washington’s support in dealings with the IMF. He spoke in an interview with American reporters.

″If the country is determined to do without it, fine,″ Babanginda said of widespread opposition to the $2.4 billion loan, one of whose conditions is a major devaluation of the naira, Nigeria’s currency. Economists and bankers say the loan is crucial to avert financial collapse in this West African country of more than 90 million people, which is a major oil exporter.

″What I am saying is, and I’ve made it quite clear, whatever decision we take, whether for or against, I maintain that it is going to be a decision based on what the Nigerian populace wants,″ he said.

The 44-year-old specialist in armored warfare was dressed in green military garb, with a pin on his black beret that said: ″War Against Indiscipline.″ He sat in a maroon leather chair with the nation’s seal imprinted on it.

Babangida pledged after taking power in a bloodless coup Aug. 27 that he would end a deadlock in negotiations with the IMF on a solution to economic problems caused by a decline in the price of oil and a glut in world supply.

He had accused his predecessor, Maj. Gen. Muhammadu Buhari, of being insensitive to opinions outside his inner circle and called for nationwide debate on the IMF loan. The debate has been vigorous, and its predominant tone negative.

In addition to the $2.4 billion needed to meet a critical balance of payments deficit, Nigeria must have IMF approval to get funds from other international sources.

Babangida has said lately that his ruling military council will not decide about the loan until it has heard all the evidence. A pro-loan campaign has begun, with full-page newspaper advertisements.

Asked about pressure from Western banks for acceptance of the IMF terms, Babangida said: ″I think I have been trained and brought up to have a look at things, issues, critically. Analyze them, consider all the options open before you eventually take a decision. I think it is important where there is a thing that has to do with national interest concerned. I think one should’t get in a hurry.″


He noted that previous governments, civilian and military, had met some IMF conditions for help in dealing with the foreign debt, now more than $20 billion.

The government will ″initiate ... discussions on debt rescheduling. I think we are going to do that. We are going to reschedule,″ he said in reference to short-term debts of more than $6 billion for goods already delivered.

Western bankers here say virtually all world suppliers have cut Nigeria off, and it will run short of most imported goods in a few months without rescheduling.

Babangida said he had asked the United States for help in negotiations: ″We did appeal for closer cooperation between Nigeria and the United States. I think this is how we do it.″

He suggested he had a better relationship with the United States than Buhari, noting that he trained at the armored command center at Fort Knox and studied international defense management in Monterey, Calif.

The general repeatedly called himself an optimist, expressing hope for real progress during the 15-month economic state of emergency he declared Oct. 1, the 25th anniversary of Nigerian independence from Britain.

Nigeria has experienced five coups, and the military has been in charge for more than half the years since independence. Corruption has been widespread, and a major argument against the IMF loan is that the money would be siphoned off.