Nigeria completes debt payments
Nigeria has become the first African state to settle its public debt under a scheme devised to help the world’s poorest and endebted states, paying off the last of its dues to foreign creditor countries, a senior official said.
The west African giant became free of its $30.4 billion debt on Friday.
The oil-rich, but poverty-wracked and unstable, country has managed to settle its debts without qualifying for the 100% relief under a combined debt-relief and buy-back scheme.
“The Central Bank of Nigeria has already given instructions to the relevant banks to effect the payment,” said Dr Mansur Muhtar, head of Nigeria’s Debt Management Office, announcing a final transfer of $4.518 billion.
The deal, under which the Paris Club of lending countries agreed to write off $18 billion in debt in exchange for an immediate repayment of the balance is seen as a victory for president Olusegun Obasanjo’s troubled economic reform programme.
Critics
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“Twelve billion dollars [repayments] in Nigeria would have gone a long way towards saving children, immunisation, healthcare,all kinds of things” Professor Jeffrey Sachs, critic |
But it has been criticised by campaigners against Third World debt and by the Nigerian opposition, which accuses Obasanjo of squandering soaring oil revenues to curry favour with foreign powers while failing to help the poor.
But not everyone is convinced, however, that Africa’s most populous nation got a good deal in its negotiations.
The Jubilee Debt Campaign, a pressure group, notes that the $12.4 billion that Nigeria has paid back over the past six months is more than the G8 club of rich nations will give away in debt relief to poor countries over 10 years.
“Twelve billion dollars in Nigeria would have gone a long way towards saving children, immunisation, healthcare, all kinds of things,” Professor Jeffrey Sachs, director of the UN Millennium Project, told British lawmakers last year.
Bad deal?
“But the donors got greedy. They said, ‘Take the oil revenue that you have responsibly been saving up, and instead of investing it in your needs, give it to us’,” Sachs complained.
Nigeria is Africa’s biggest oil exporter, shipping some 2.6 million barrels of crude to the industrialised West every day; but decades of corrupt misrule have left three-quarters of its 130 million people living in abject poverty.The World Bank says 75% of Nigerians live on less than a dollar per day
Obasanjo’s economic reform programme has coincided with rocketing world oil prices and his government is now sitting on top of $34.3 billion in foreign reserves, despite having repaid its Paris Club debts. It still owes five billion dollars to private lenders.