Nigeria at risk of $33bn default
2005-04-26 13:51
London - Nigeria was heading towards an "Argentinian-style" default on its US$33bn of overseas debt unless Western creditors helped out fast, a delegation from west Africa's biggest economy has warned, according to a British newspaper on Tuesday.
The Guardian newspaper quoted Farouk Lawan, the chairperson of the finance committee of Nigeria's house of representatives, as saying it was "unconscionable" that the country had paid £3.5bn ($6.67bn) in debt service over the past two years.
During that time, the debt burden had risen by £3.9bn without any new borrowing, he added.
"We cannot continue. We must repudiate this debt," Lawan reportedly said during a visit to London on Monday.
Britain is Nigeria's largest creditor, with 21% of its debt, and finance minister Gordon Brown has backed an initiative to use Nigeria's windfall from higher oil prices to pay the creditors a fraction of what they are owed, the daily said.
Nigeria is Africa's largest producer of crude oil.
The report meanwhile weighed heavily on the pound in early European trading on Tuesday, dealers said.
Another member of the Nigerian delegation on a four-country visit, senator Udo Udoma, was quoted as saying: "We are spending three or four times as much on debt service as we are on education and 15 times as much as we are spending on health.
"Time is running out. The level of frustration is very high."
The group also said that Nigeria's plight was far worse than that of Argentina, which this year presented its creditors with a "take it or leave it" offer to pay 30c for each dollar owed, the newspaper said.
Britain, as current president of the Group of Eight industrialised nations, wants the world's richest donor countries to assume a proportion of developing nations' debt owed to them through the World Bank and African Development Bank, and service it themselves.
Nigeria's President Olusegun Obasanjo last month said he would halt payments on his country's multi-billion-dollar foreign debt if parliament voted a law to that effect.