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Nigeria’s foreign debt rises to $4bn

By Luka Binniyat
ABUJA— FOUR years after exiting the infamous $30 billion Paris and London Clubs debts, Nigeria’s external debt profile today stands at $3.947 billion, the Minister of Finance, Alhaji Mansur Muhtar said in Abuja, yesterday.

The Minister who made this known at a public hearing organized by the House of Representatives ad-hoc Committee on Foreign Loans, also affirmed that Nigeria would borrow more this year, but “in a sustainable” way.

The Deputy Speaker of the House of Representatives, Hon. Bayero Nafada who declared  the hearing open, said that past leaders had rushed into borrowing huge sums of money and never utilized them well, noting that their actions were informed by the fact that they knew they would not be in power when the obligations of paying back arose.

The Minister said that in line with current National Borrowing Guidelines, Nigeria’s external debt since the exit from the Paris Club and the London Club debts, has been limited to concessional sources.

Stressing that the current external debt burden of Nigeria as at the end of 2009 stood at $3.947 billion, Muhtar said the Federal Government owed $2.729 billion, while state governments owed $1.854 billion.

The minister said that the credits were essentially from the International Development Association, IDA, and the African Development Bank, ADB. He said: “The loans have a repayment period of about 40 years with a 10 year grace period.

Although several loans were considered, negotiated and processed between 2007 and 2009, only $1.831 billion became effective during the period.”

Muhtar said that since government was committed to improving on infrastructure and the wellbeing of the people, it would continue to borrow this year.

He, however, said that the Debt Management Office, DMO, had developed a National Debt Management Framework, NDMF, to guide the policy and strategy for external and domestic borrowing to sustainable levels.


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