Okonjo-Iweala says Nigeria Owes $6.7Bn

Dr. Ngozi Okonjo-Iweala, coordinating minister for the Economy and minister of Finance, has put the nation’s external debt at $6.67 billion while the country spent some $8. billion to service debt in 2006 and $10. 1 billion in 2005.

Okonjo-Iweala however said that the clarification became necessary in view of the various figures being quoted in the debate over the nation’s indebtedness.

“As at now, our external indebtedness is as low as $6.67 billion or about 3 percent of Gross Domestic Product, GDP.” She said

According to her, “the external debt is typically owed to foreign creditors such as multilateral agencies [like the Africa Development Bank, World Bank, the Islamic Development Bank], as well as other bilateral sources [including the China Exim Bank, the French Development Bank or the Japanese Aid Agency], or to private creditors such as investors in our Eurobonds.”

The Minister said that most external loans were contracted on concessional terms.

“Many of the multilateral loans are at zero interests, 40 years maturity, and 10 years grace. Others are at less than three percent rate of interest.”

Okonjo-Iweala assured that the Federal Government would continue to closely monitor the nation’s debt stock to keep it low.

Her words, “we shall never be complacent about our national debt. We need to be constantly vigilant to limit the amount of debt and create room for the private sector instead to borrow. As such, we need to stay focused on three main priorities.

‘’We should continue to monitor our external borrowing and ensure that we do not slip back to our high indebtedness prior to the debt relief programme. As I mentioned earlier, the External Borrowing Plan, helps to address this concern by ensuring that we always have a comprehensive, transparent view of our foreign borrowing.

‘’We should closely continue to monitor and limit our domestic debt, and ensure that it stays within a prudent and conservative range. We should pay off debt that is due to the extent of our ability. We should also continue to closely monitor borrowing by states to ensure that the debt burdens of our state governments remain within manageable levels and that borrowings are applied to specific projects that yield results for citizens of the state.

In that regard, we enjoin banks and other lenders to be careful and prudent when lending to ensure that this is done within the existing rules, regulations and guidelines.”