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Paris Club yet to receive Nigeria’s $6.4bn

Posted by Gbade Ogunwale and Oluyinka Akintunde, Abuja on 2005/11/17 | Views: 535 |

Paris Club yet to receive Nigeria’s $6.4bn


The Paris Club of International creditors is yet to receive the $6.4billion repayment made by Nigeria in October, the Minister of Finance, Dr. Ngozi Okonjo-Iweala, has said.

The Paris Club of International creditors is yet to receive the $6.4billion repayment made by Nigeria in October, the Minister of Finance, Dr. Ngozi Okonjo-Iweala, has said.

This position is contrary to speculations that the executive arm had paid the creditors without the approval of the National Assembly.

Okonjo-Iweala made the clarification on Wednesday in Abuja while answering questions in the Senate on the status of the $18billion debt relief agreement between the country and the creditors.

Under the debt buy-back deal with the Paris Club, Nigeria will pay $12.4billion in two tranches and earn a write off of $18billion.

The minister stated that although the country stands to benefit immensely from the agreement, the executive arm would not pay the money without approval from the National Assembly.

"There is need for the National Assembly to appropriate money for the payment because there is no way we can pay without authorisation from the National Assembly," she said.

Okonjo-Iweala, however, told the senators that the country should be ready to pay the money as the Federal Government had already put the money in an escrow account pending the approval of the National Assembly.

She said the over $30billion debt owed the Paris Club should be liquidated by March 2006 and that the reduced repayment agreed to must be paid in the same currencies in which they were borrowed.

The minister stated that the $18billion that the country stands to gain after the payment of $12.4billion was the second largest debt write-off in the 50-year history of the Paris Club.

Meanwhile, the Chairman of the Revenue Mobilisation Allocation and Fiscal Commission, Alhaji Hamman Tukur, also on Wednesday said that the Federal Government and 33 states of the Federation were the ones indebted to the Paris Club which stands at $30billion.

He said that only three states out of 36 and all the 774 local government councils in the country, were not indebted to the Paris Club.

Making this known in Abuja during a courtesy visit by the Governor of Jigawa State, Alhaji Saminu Turaki, to the RMAFC’s Office in Abuja, Tukur said that the three states and 774 local government councils should not be made to suffer for the debt incurred by the Federal Government and 33 state governments.

He said, "All states owe foreign debts. But there are those that do not owe the Paris Cub. They may owe other foreign institutions but not the Paris Club.

"Some states (about three) and all the 774 local Government councils that do not owe the Paris Club would suffer deductions if appropriations are made from the Federation Account instead of from their respective consolidated accounts."

Nigeria owed the Paris Club the sum of $30.847billion as at December 31, 2004, comprising outstanding principal of $25.199billion and arrears of $5.648billion.

The RMAFC chairman, who lauded the Federal Government for achieving substantial debt forgiveness for the country, expressed the commitment of the commission to ensure that only the affected tiers of government meet their remaining debt obligations.

He urged the government to ensure that procedures for settlement of debts were fair and just otherwise those who do not owe the Paris Club would suffer financial implications.

The PUNCH, Thursday, November 17, 2005

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