The Federal government is likely to conclude its on-going negotiations with the Paris Club on debt pardon in September. The government is likely to sign a Memorandum of Understanding (MoU) for part payment of the balance debt amount of USD 12bn, which is expected to be repaid in two instalments.
The first instalment of USD 6bn is expected to be paid in September.
The Paris Club has agreed to cancellation of 60% of Nigeria's outstanding foreign debt of USD 30bn, effectively granting relief of USD 18bn. The government is expected to pay USD 6bn in September after signing the pact. The date for the balance payment is to be decided later on.
The Minister of Finance, Ngozi Okonjo-Iweala said that President Olusegun Obasanjo is expected to meet state governors and stakeholders on the modalities for payment of the agreed sum immediately upon signing the MOU. Newspaper The Guardian reported that however, Okonjo-Iweala did not disclose when the meeting would take place or the likely source of the funding. The newspaper further reported that Nigeria is likely to make use of its external reserves of USD 24bn to pay the USD 12bn debt.
Jeffrey Sachs: Nigeria needs more debt relief
Special Advisor to the UN Secretary General on Millennium Development Goals (MDGs), Jeffery Sachs, said that the recent USD 18bn debt pardon granted to the country by the Paris Club of creditor-nations is inadequate. Sachs, who is on a three-day official visit to Nigeria, said that Nigeria deserves annual grant of between USD 2bn-3bn from the creditor nations in order for it to meet the jointly set targets of the MDGs.
Newspaper The Guardian quoted Sachs as saying that the Structural Adjustment Programme (SAP) embarked upon by African governments some decades ago was a mistake where the rich ones were simply trying to squeeze money from the economies. Sachs said that the last 25 years had been a disastrous period. SAP enabled people in the other parts of the world, the creditors to turn away from the sufferings of the poor nations without doing anything.