Nigeria’s debt at 31 billion US dollars: official

LAGOS, Aug. 1 (Xinhua) — Nigeria’s debt profile has been put at 31 billion US dollars, local newspaper This Day on Friday quoted Charles Soludo, economic adviser to President Olusegun Obasanjo, as saying.

Nigeria, which ought to service its debt by paying 4.9 billion dollars annually, has been defaulting by paying less, said the president’s economic adviser.

The default, he said, has resulted in penalties.

“We cannot afford to pay this contractual agreement. We need significant debt relief,” he said, “Nigeria is not pleading for mercy, because we have an agenda and expect the international community to show understanding.”

Soludo said the country needs debt concession because of its high debt stock.

“By its per capita income and other characteristics, Nigeria has many poverty and development challenges,” he added.

A recent analysis of the nation’s foreign debts by the Debt Management Office (DMO) shows that debt service requirements of the country to both the London and Paris Clubs would not be less than 4,884,950,950,832.20 dollars in 2003.

This amount includes a total of 1.131 billion dollars required by the state governments to service their foreign debt in 2003 and 3.754 billion dollars required by the federal government to service its debts to the two groups of creditors.

Late last year, Nigeria offered to buy back 2 billion dollars worth of its commercial Brady debt in an effort to restructure its unsustainable debt burden and improve relations with the International Monetary Fund (IMF).

Nigeria is already in default on 22 billion dollars worth of Paris Club debt, owed to sovereign lenders, and is struggling to service its 3.5 billion dollars London Club obligations which include 2 billion dollars in Brady bonds, debt restructured under plans devised by Nicholas Brady, the former US Treasury secretary. Most of these are held by hedge funds and dedicated emerging market investors.

The re-negotiation marks an end to Nigeria’s tradition of meeting commercial debts while neglecting to make the bulk of its payments on its Paris Club debt, two thirds of which comprises interest arrears and penalties for non-payment.