External Debt Now $6.6bn – Okonjo-Iweala

okonjo-iweala

Nigeria’s external debt stands at $6.67 billion, (about N1.035 trillion), Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, has said.

Giving clarifications on the country’s total external indebtedness on Friday, the minster said Nigeria spent $8.0429 billion to service debt in 2006 and $10. 1072 billion in 2005 before the debt relief of 2006. Most external loans were contracted on concessional terms.

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

“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.”

“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,” she added.

She spoke further: “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,” she added.