Nigeria: Country May Get Further Debt Relief
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Nigeria may qualify for debt relief if the Jubilee Act, a new United States (U.S.) Congress legislation is passed into law. The Jubilee Act for Expanded Debt Cancellation and Responsible Lending, introduced by Senators Robert Casey, Richard Lugar, Chris Dodd and co-sponsored by Senators Barack Obama, Joseph Biden and John Sununu will authorise expanded debt cancellation in order to help developing countries fight poverty. It will also ban harmful economic policies and conditionalities that keep lenders perpetually in debt to creditors including the World Bank and the International Monetary Fund (IMF). Two years ago, Nigeria paid $12.2 billion to exit the Paris Club, with $18 billion written off. Early this year, Nigeria exited London Club with the payment of $2.08 billion. Nigeria currently owes about $3.5 billion to multilateral institutions. Currently, Nigeria is not qualified for debt cancellation under the World Bank’s Heavily Indebted Poor Country (HIPC) programme. Other countries in this category are Angola, Bangladesh, Burma, Cambodia, Djibouti, Kiribati, Kyrgyz Republic, Maldives, Solomon Islands, Tajikistan, Timor-Leste, Tonga, Republic of Yemen and Zimbabwe But the new bill, already under consideration in the U.S. Senate and House of Representatives, will give Nigeria and the other countries in the same category a chance to improve their human rights records and financial management practices, thereby qualifying them for outright debt cancellation. “One of the requirements is that countries have to have suitable, transparent public financial management policies in order to be able to qualify. We think Nigeria could eventually qualify for that cancellation but probably won’t be eligible right away,” said the National Coordinator of Jubilee USA Network, Neil Watkins, whose organisation has been pushing for the debt cancellation legislation. “Basically, what the legislation says is that if a country is eligible for International Development Association (IDA)-only assistance, they have to make sure they have good human rights practices. They also have to prove they will be able to use the debt relief well. They have to have budget transparency and good public financial management practices,” he affirmed. The Bill was introduced in the Senate on October 16 and in the House on June 7th - House Bill HR2634. Explaining why Jubilee USA Network has been pursuing the legislation, Watkins stated that debt relief is an important tool in the achievement of the Millennium Development Goals (MGGs). He observed that there needs to be trade justice and more aid to countries struggling economically. He expressed concern that the World Bank and International Monetary Fund (IMF) debt relief programmes do not cover all countries that need it in order to fight poverty and achieve the MDGs. The organisation has therefore been encouraging members of Congress to see the benefits of a legislation to expand debt relief for more countries. He however stated that it is absolutely up to each country to apply for debt relief when they do qualify. He also pointed out that although Nigeria may have reached an agreement with private creditors, it continues to carry the burden of servicing its multilateral debt. |