Jubilee USA Network
January 5, 2006
Eighteen Members of the United States Congress sent a letter yesterday to US Treasury Secretary John Snow and Export-Import Bank President James Lambright, requesting that the US return its share of the $12.4 billion to be paid by Nigeria in arrears payments and debt stock by March 2006 as part of a deal reached with the Paris Club group of creditors.
In October 2005, the Paris Club, including the US, agreed to cancel $18 billion of Nigeria’s total debt of around $30 billion to these creditors. As part of the deal, however, Nigeria had to agree to pay $12.4 billion by March 2006 to the Paris Club. At the time civil society groups in Nigeria, the UK, and US raised strong concerns that this amount was urgently needed in Nigeria for AIDS, health, and education, instead of being sent to Northern creditors.
As part of the deal, the US will receive a total payment of $396 million by March 2006. The US share of the debt is held by the Ex-Im Bank and the US Agency for International Development.
The Congressional letter, initiated by Rep. Donald Payne (D-NJ) and Rep. Maxine Waters (D-CA), welcomes “the significant cancellation of Nigeria’s debt agreed to by the Paris Club group of creditors in October 2005. Nigeria has long been burdened by an unjust and unpayable debt burden, and we appreciate the role of the US government in securing this considerable debt write-off, which will mean that $18 billion of Nigeria’s $34 billion debt will be fully cancelled.”
But the letter points out that in Nigeria “[o]ne in five children does not live to the age of five. In Nigeria, 2,500 children are dying needlessly every day from preventable diseases, and more than 300,000 Nigerians die each year from HIV/AIDS.” It goes on to quote UN special advisor Jeffrey Sachs who also urged the US and other creditors to not accept Nigeria’s payment: “Twelve billion dollars in Nigeria could go a long way towards saving children, provide immunization, healthcare, education… I say to the donors: ‘Return that money’…”
The US holds a smaller share of Nigeria’s debt in comparison to other Paris Club creditors. The UK, Italy, France, and Germany are Nigeria’s largest creditors. Parliamentarians and aid agencies in these countries have raised similar concerns with their own governments. In December, religious leaders and debt campaigners in the UK called for the UK Treasury to return its majority share of the Paris Club debt payment to Nigeria. Nine UK charity heads including the directors of Oxfam and Christian Aid wrote to Prime Minister Tony Blair urging him to refuse Nigeria’s payment. This Congressional letter is part of that global effort.
The letter also expresses concern that the Paris Club deal may strengthen the International Monetary Fund’s “control over Nigeria’s future economic policy choices through the implementation of the new IMF Policy Support Instrument, whose real ownership still remains to be verified.” It points out that “much of Nigeria’s debt can be considered odious given the fact that the original loans were made to authoritarian regimes – many of which were then looted while interest and penalties accumulated.”
Signatories pressed for “continued leadership by the US government to return this money to Nigeria’s people thereby signaling its commitment to development and poverty reduction in Africa.”
Jubilee USA Network is the US arm of the international movement working for debt cancellation for impoverished nations. Jubilee USA is a network of over 70 religious denominations, labor groups, environmental organizations, and community and advocacy groups working for freedom from debt for countries in Africa, Asia, and Latin America.