The Debt Trap and the Current Crisis in Nigeria: An Historical Analysis

One of the most pressing problems of third world countries today is that of foreign debt. Third world debt is now a matter of serious concern to the leading industrialised countires whose banks and governments have advanced or guaranteed the credit. For instance, both the City Corporation of New York and the Midland Bank of the United Kingdom had to sell their assets to make provision for bad debts arising out of the inability of third world countries to repay their debts. The debt problem is the result of the international devision of labour and the location of the third world countries within the existing international division of labour. As primary producers they have atched helplessly as the prices of their products plunged in the international market while the prices of manufactured goods keep rising. Superficially, it is this imbalance between their export earnings and their import bills that has created the debt problem.