Campaigners give qualified welcome to Nigeria debt deal
-23/10/05
Both Christian Aid in Britain and the Jubilee USA network of church and secular action groups have welcomed the move from rich country creditors to write off a substantial portion of Nigeria’s debt.
But they have also warned about the terms of the debt buyback and the involvement of the International Monetary Fund (IMF).
The Paris Club, a group of 19 wealthy nations, officially announced the deal two days ago. It involves an 18 billion US dollar cancellation of Nigeria’s debt, from a total of around 30 billion dollars owed to the group.
Anti-debt pressure groups worldwide, including Make Poverty History, have repeatedly called for the cancellation of all debts owed by poor countries, especially those in Africa.
Jubilee USA, part of this global coalition, expressed concern about specific terms of the agreement reached by Nigeria and the Paris Club creditor nations.
The deal requires the Nigerian government to spend 12 billion US dollars on debt service payments over the next six months as part of the buyback arrangement, while adhering to a stringent, newly-created IMF economic programme.
Jubilee USA says the new IMF programme, the Policy Support Instrument, extends IMF power to those countries it is not lending to, noting that ìpast impoverished country experiences with similar IMF programmes have shown that such programmes lead countries to privatise essential services and cut social sector spending.î
It went on: ìDespite the concerns, Jubilee USA Network shares the Nigerian governmentís hopes that debt cancellation will allow the country to channel resources away from debt servicing and towards health care, education, and other critical social needs.î
The Washington DC-based Jubilee USA is a network of over 70 religious denominations, labour unions, environmental organisations, and community and advocacy groups working for freedom from debt for countries in Africa, Asia and Latin America.
Sony Kapoor, a senior policy adviser working with UK-based international agency Christian Aid commented: ìThe deal will provide much overdue relief and free Nigeria from much of its debilitating debt. However it took the threat of repudiation to get this cancellation – as if the obvious need of the people and the odious nature of much of the debt were not enough.î
Kapoor added: ìWhat is worse is that creditor countries are extracting a pound of flesh in the form of 12 billion US dollars worth of payments from Nigeria and have put in place a new IMF programme despite Nigeria not owing anything to the Fund. On a more positive note, the deal has set the scene for a more assertive negotiating stance by other indebted developing countries.î
Campaigners give qualified welcome to Nigeria debt deal
-23/10/05
Both Christian Aid in Britain and the Jubilee USA network of church and secular action groups have welcomed the move from rich country creditors to write off a substantial portion of Nigeria’s debt.
But they have also warned about the terms of the debt buyback and the involvement of the International Monetary Fund (IMF).
The Paris Club, a group of 19 wealthy nations, officially announced the deal two days ago. It involves an 18 billion US dollar cancellation of Nigeria’s debt, from a total of around 30 billion dollars owed to the group.
Anti-debt pressure groups worldwide, including Make Poverty History, have repeatedly called for the cancellation of all debts owed by poor countries, especially those in Africa.
Jubilee USA, part of this global coalition, expressed concern about specific terms of the agreement reached by Nigeria and the Paris Club creditor nations.
The deal requires the Nigerian government to spend 12 billion US dollars on debt service payments over the next six months as part of the buyback arrangement, while adhering to a stringent, newly-created IMF economic programme.
Jubilee USA says the new IMF programme, the Policy Support Instrument, extends IMF power to those countries it is not lending to, noting that ‘past impoverished country experiences with similar IMF programmes have shown that such programmes lead countries to privatise essential services and cut social sector spending.’
It went on: ‘Despite the concerns, Jubilee USA Network shares the Nigerian government’s hopes that debt cancellation will allow the country to channel resources away from debt servicing and towards health care, education, and other critical social needs.’
The Washington DC-based Jubilee USA is a network of over 70 religious denominations, labour unions, environmental organisations, and community and advocacy groups working for freedom from debt for countries in Africa, Asia and Latin America.
Sony Kapoor, a senior policy adviser working with UK-based international agency Christian Aid commented: ‘The deal will provide much overdue relief and free Nigeria from much of its debilitating debt. However it took the threat of repudiation to get this cancellation – as if the obvious need of the people and the odious nature of much of the debt were not enough.’
Kapoor added: ‘What is worse is that creditor countries are extracting a pound of flesh in the form of 12 billion US dollars worth of payments from Nigeria and have put in place a new IMF programme despite Nigeria not owing anything to the Fund. On a more positive note, the deal has set the scene for a more assertive negotiating stance by other indebted developing countries.’