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US worried about Nigeria, other African countries’ debt overhang

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The United States of America  has expressed worry about the heavy indebtedness by African countries a few years after they were relieved of their debts by international financial institutions.

Buhari and Trump

The US Department of State, during a background briefing on the first trip of Secretary of State,  Rex Tillerson to Africa, said such loans were unhelpful to the continent.

Mr. Tillerson will meet with Nigeria’s President Muhammadu Buhari and also leaders of Chad, Djibouti, Ethiopia and Kenya during his travels from March 6 to 13.

To date, debt reduction packages under the Heavily Indebted Poor Countries, HIPC, Initiative have been approved for 36 countries, 30 of them in Africa, providing $76 billion in debt-service relief over time.

In 2005, to help accelerate progress toward the UN Millennium Development Goals, the HIPC Initiative was supplemented by the Multilateral Debt Relief Initiative, MDRI.

Nigeria was one of the countries that benefitted from the debt relief under ex-President Olusegun Obasanjo.  About $12 billion debt was cancelled for Nigeria in a deal that saw the country repay about $18 billion.

The burgeoning debt by the Nigerian government since then, especially during the Muhammadu Buhari, has been of concern to observers.

Vice President Yemi Osinbajo, however, allayed the fears in an interview on Friday when he said the borrowed sums were judiciously being utilised for massive infrastructural projects across the country.

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