Nigeria to Pay More to Paris Club in 2001: Official
December 16, 2000 - 0:0
ABUJA Nigeria will actually pay more to its Paris Club creditors in 2001 than in 2000 under the debt rescheduling deal made this week, AFP quoted the country's debt negotiator as saying Friday.
The Paris Club of wealthy creditor nations announced Wednesday it had reached an agreement with the Nigerian government to reschedule $23.4 billion of its $33.5 billion in debts.
The agreement depends on Nigeria continuing to get approval from the International Monetary Fund (IMF) for its economic reforms and would only come into effect on April 15 next year.
Among key IMF concerns are progress on liberalization of the telecommunications and power sectors, government spending and transparency.
In a statement, Nigeria's chief debt negotiator, Phillip Asiodu, said it was a good agreement, rescheduling the bulk of Nigerian debt and opening the way to future bilateral debt write-offs.
It also puts relations with the Paris Club back on a regular footing, ending years of nonpayment or underpayment of dues calculated, prior to the agreement, at $2.4 billion for 2001.
The one billion dollars due to the Paris Club in 2001 under the agreement was a sharp cut from $2.4 billion, but was still above the $700 million paid in 2000, he said.
On top of the Paris Club payments, Nigeria also has to make debt service payments to commercial and other creditors and has budgeted $1.5 billion for payments in 2001.
Asiodu said the overall deal would still leave the Nigerian government with difficulties in meeting its spending programs indicating a need for substantial debt write-offs in the coming year.
"Following two days of intensive negotiations, Nigeria agreed to increase the level of debt service payments for year 2000 and 2001 to $700 million and one billion dollars respectively.
"This paved the way for an agreement on the rescheduling of Nigeria's debts," he said.
"Nigeria welcomes this agreement but considers the terms insufficient to provide needed relief for meeting its acute economic and social problems," Asiodu added.
"The level of debt service payment is still considered too high to enable it to undertake vital social and infrastructural spending needed to alleviate poverty and improve living standards," the official said.
"The amount currently proposed for debt service under the rescheduled arrangement still represents nearly half the country's entire capital budget, at least three times the amount allocated for education and eight times the budget for the health sector, and a similar proportion for spending on water supply," he said.
Reacting to the agreement on Wednesday President Olusegun Obasanjo, speaking to AFP through his spokesman Doyin Okupe, said it was "very encouraging" and a vindication of his government's economic reform programs.
"The announcement by the Paris Club is very encouraging. It is a vindication of the fiscal measures that this government has instituted since its inception," he said.
The president said the Paris Club agreement would now open the way for "bilateral discussions with individual creditor governments" to reduce the overall debt stock.
The Paris Club of wealthy creditor nations announced Wednesday it had reached an agreement with the Nigerian government to reschedule $23.4 billion of its $33.5 billion in debts.
The agreement depends on Nigeria continuing to get approval from the International Monetary Fund (IMF) for its economic reforms and would only come into effect on April 15 next year.
Among key IMF concerns are progress on liberalization of the telecommunications and power sectors, government spending and transparency.
In a statement, Nigeria's chief debt negotiator, Phillip Asiodu, said it was a good agreement, rescheduling the bulk of Nigerian debt and opening the way to future bilateral debt write-offs.
It also puts relations with the Paris Club back on a regular footing, ending years of nonpayment or underpayment of dues calculated, prior to the agreement, at $2.4 billion for 2001.
The one billion dollars due to the Paris Club in 2001 under the agreement was a sharp cut from $2.4 billion, but was still above the $700 million paid in 2000, he said.
On top of the Paris Club payments, Nigeria also has to make debt service payments to commercial and other creditors and has budgeted $1.5 billion for payments in 2001.
Asiodu said the overall deal would still leave the Nigerian government with difficulties in meeting its spending programs indicating a need for substantial debt write-offs in the coming year.
"Following two days of intensive negotiations, Nigeria agreed to increase the level of debt service payments for year 2000 and 2001 to $700 million and one billion dollars respectively.
"This paved the way for an agreement on the rescheduling of Nigeria's debts," he said.
"Nigeria welcomes this agreement but considers the terms insufficient to provide needed relief for meeting its acute economic and social problems," Asiodu added.
"The level of debt service payment is still considered too high to enable it to undertake vital social and infrastructural spending needed to alleviate poverty and improve living standards," the official said.
"The amount currently proposed for debt service under the rescheduled arrangement still represents nearly half the country's entire capital budget, at least three times the amount allocated for education and eight times the budget for the health sector, and a similar proportion for spending on water supply," he said.
Reacting to the agreement on Wednesday President Olusegun Obasanjo, speaking to AFP through his spokesman Doyin Okupe, said it was "very encouraging" and a vindication of his government's economic reform programs.
"The announcement by the Paris Club is very encouraging. It is a vindication of the fiscal measures that this government has instituted since its inception," he said.
The president said the Paris Club agreement would now open the way for "bilateral discussions with individual creditor governments" to reduce the overall debt stock.