Nigeria's relentless efforts to get creditors to write off its USD 32bn debt received a setback, as IMF said that Nigeria could use its excess revenue from current high global oil prices for debt servicing. The IMF Staff Mission report at the Conclusion of 2005 Article IV Consultation discussions with Nigeria, noted that the mission encourages the authorities to regularise relations with external creditors.
According to the IMF staff mission to Nigeria, the debt sustainability analysis suggests that Nigeria's external debt is sustainable owing to current high oil prices. However, sensitivity analysis indicates that the debt situation would be unsustainable at lower oil prices. The IMF team led by Menachem Katz, visited Nigeria between Mar 8-25 to conduct the 2005 Article IV Consultation discussions, to review the performance of the federal government's economic programme, - National Economic Empowerment Development Strategies (NEEDS) and to discuss the outlook for 2005.
Although Nigeria does not have any outstanding obligations with the IMF programme, it has an arrangement with the institution, wherein IMF monitors its economic programmes. Earlier in meetings with members of the Paris Club, Minister of Finance, Nogzi Okonjo-Iweala and other government officials have argued that servicing Nigeria's high debt would affect the country's development and growth.