[stop-imf] Nigeria to get $18bn debt relief

[robert weissman]

BBC News
June 30, 2005

*Nigeria** to get $18bn debt relief *

*The Paris Club of creditor countries has agreed the outline of a debt
relief package for Nigeria. *

About $18bn (=A310bn) of debt will be written off and Nigeria plans to buy
back a chunk of outstanding loans.

The country owes the rest of the world $35bn, and the new talks are
linked to an agreement between Nigeria and the IMF on debt repayments.

Nigeria is the world's seventh-largest oil exporter and Africa's most
populous nation, but also one of its poorest.





*The Paris Club have agreed in principle a further debt write-off...
which with a buyback of debt by the Nigerian authorities will mean that
there is 100% debt relief for Nigeria possible over the next six months *
Gordon Brown, UK chancellor

About $31bn of Nigeria's debt is owed to members of the 19-nation-strong
Paris Club. It has not received any fresh loans since 1992, but repaid
$8bn debt since then.

Part of Nigeria's case in asking for debt relief has been that most of
the money it received was lent to corrupt military dictators, a fact the
African country says was well known by foreign banks and governments.

The UK's Chancellor of the Exchequer, Gordon Brown, said the debt relief
combined with the debt buy-back would "mean there is 100% debt relief
for Nigeria possible over the next six months".

The UK is Nigeria's biggest creditor and has been attempting to persuade
other G8 creditors of the need for debt write-off.

*'Economic reform' *

The debt breakthrough came after Nigeria expressed its willingness to
clinch a new deal with the IMF to pay its arrears to Paris Club creditors.

"The representatives of the Paris Club creditor countries... expressed
their readiness, consistent with their national laws and regulations, to
enter into negotiations with the Nigerian authorities in the months to
come on a comprehensive debt treatment," said the group of creditor
nations.

"They took note of the economic reform programme implemented by the
Nigerian authorities since 2003 and of their willingness to take
advantage of exceptional revenues in order to finance an exit treatment
from the Paris Club."

It said the debt relief would be significant, and allow for long-term
debt sustainability.

The initial debt relief terms will be based on the so-called "Naples
terms" - which are equivalent to a 67% reduction on the face value of
debt and are applied to debts of poorest nations.

*'Major development' *

"As an initial negotiating position, it is welcome, but Nigeria will
naturally press for a higher discount," said Nigerian senator Udo Udoma.

"It is a major development because about a year ago they (Paris Club)
were not willing to listen to any plea for debt relief.

"To move from zero to 67% within a year is a major development, I am
excited by that."

Campaign group Actionaid welcomed the deal, saying that "Nigerians have
been paying out in debt repayments nearly six times the amount they
receive in aid."

"As home to one in five Africans, progress on debt in Nigeria is
critical to progress on poverty in Africa," the organisation said.

Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/1/hi/business/4637395.stm

Published: 2005/06/30 12:23:14 GMT

=A9 BBC MMV