Nigerian lawmakers have put pressure on rich Western creditor nations to cancel some of the country’s $35 billion debt and revived a threat to halt payments unilaterally.

The government of Africa’s top oil exporter believes it now has a better chance than ever for relief because Britain, its main backer and largest creditor, holds the presidency of the Group of Eight rich nations.

“The mood in the National Assembly is that there would be no negative consequences from halting debt payments because Nigeria doesn’t have any credit lines,” said Senator Udoma Udo Udoma, who is leading a team of lawmakers and government officials to lobby Britain, Germany, Italy and the United States. He was speaking to Reuters by telephone from Washington.

The House of Representatives passed a non-binding motion in March calling for a halt to all foreign debt payments, but it later made a u-turn by passing this year’s budget including $1.3 billion in repayments.

The country’s long-standing debt relief campaign received a setback last month when the International Monetary Fund (IMF) said it could afford to make payments in full because of record high oil revenues that have swollen its foreign reserves to $20 billion.

The government rejected the idea, arguing that the windfall should be saved to cover shortfalls when prices drop.

Nigeria has focused its campaign for relief on $28 billion of sovereign debt owed to the Paris Club of rich creditor nations. It currently pays the Paris Club $1 billion every year, less than half what is due, so the total stock of debt grows every year.

Nigeria has also lost out to a weakening dollar in the last few years, because much of its debt is denominated in euros.

“It is unconscionable that Nigeria has paid $3.5 billion in debt service over the past two years but our debt burden has risen by $3.9 billion –without any new borrowing. We cannot continue. We must repudiate this debt,” Farouk Lawan, chairman of the finance committee in Nigeria’s house of representatives, was quoted as saying in Britain’s Guardian newspaper.

The Paris Club normally insists on countries adopting a formal IMF programme before engaging in talks on debt relief or rescheduling, something Nigeria has refused to do.

Five years after winning elections that marked the return of democracy to Nigeria, President Olusegun Obasanjo has embarked on a home-grown economic reform programme including privatisation of loss-making state assets, cutting fuel subsidies, and cracking down on rampant corruption.

The government argues that the West should show more support for the changes, many of which are unpopular among Nigerians, to help them succeed. Debt relief, the government says, would help lift investment in basic services such as education and health.

“We need help from creditors to make the huge investments required to get the country back to where it was before the military came in,” Udoma said.

One in five Africans live in Nigeria, but the country receives less aid per capita than any other African country. Because of its high debt payments, there is a net flow of $12 from every Nigerian to the developed world every year.

Reuters, April 26, 2005