This snapshot taken on 10/09/2008, shows web content selected for preservation by The National Archives. External links, forms and search boxes may not work in archived websites.

January 2006

Response to NGO Campaign to return money back to Nigeria following the 20 October Paris Club debt deal

The Jubilee Debt Campaign and its supporters have sent several letters to HMT requesting that the UK return the money being repaid by Nigeria as a result of the 20 October Paris Club debt deal back to Nigeria. HMT’s response to the many people who have written is as follows:

“The 20 October Paris Club debt deal was designed by and done at the request of the Nigerian Government, based on their wish to use their additional oil revenues in this way and in support of their own economic reforms and development strategy. The UK worked very hard to help deliver this fair solution to Nigeria’s debt problems. Paris Club creditors will write off about 60% of Nigeria’s debt. The UK alone will cancel £2.8 billion. In return Nigeria will use part of its oil windfall to pay off the remaining debt”.

“This represents the largest debt relief package ever in sub-Saharan Africa. DFID has been working hard with the Nigerian authorities to ensure that all the savings from the debt cancellation are effectively targeted on reducing poverty. The deal will free up at least an additional $1 billion a year for Nigeria to spend on poverty reduction, helping to employ an extra 120,000 teachers and put 3.5 million children into school. In addition to the £2.8 billion debt cancellation, DFID is in the process of doubling its assistance to Nigeria to £100 million”.

Full response

1. The UK Government made significant progress in 2005 in the fight against poverty. The Gleneagles G8 summit agreed on an ambitious multilateral debt deal that will cancel up to $50 billion of debts owed to the IMF, World Bank and the African Development Bank. Many countries have made commitments to substantially increase their aid levels. DFID has committed £1.1 billion in bilateral assistance to Africa for 2005/06, and has committed almost twice that amount in aid though multilateral institutions, a significant proportion of which will help Africa to meet the MDGs. The UK is also working hard to make a success of the Doha round, the success of which is essential if millions of people are to have a chance to escape poverty.

2. The 20 October Paris Club debt deal was designed by and done at the request of the Nigerian Government, based on their wish to use their additional oil revenues in this way and in support of their own economic reforms and development strategy. The UK worked very hard to help deliver this fair solution to Nigeria’s debt problems. Paris Club creditors will write off about 60% of Nigeria’s debt. The UK alone will cancel £2.8 billion. In return Nigeria will use part of its oil windfall to pay off the remaining debt.

3. This represents the largest debt relief package ever in sub-Saharan Africa. DFID has been working hard with the Nigerian authorities to ensure that all the savings from the debt cancellation are effectively targeted on reducing poverty. The deal will free up at least an additional $1 billion a year for Nigeria to spend on poverty reduction, helping to employ an extra 120,000 teachers and put 3.5 million children into school. In addition to the £2.8 billion debt cancellation, DFID is in the process of doubling its assistance to Nigeria to £100 million.

4. If the UK were now to return the money being repaid by Nigeria it would require DFID to finance it from its development budget. This would mean reallocating DFID’s budget at the expense of other poor countries. Nigeria is not a HIPC, and given its relative financial position and oil resources, for the UK to go further and provide one hundred per cent debt cancellation for Nigeria would not be an appropriate allocation of our aid resources.

5. The President of Nigeria and his Finance Minister have both welcomed the Paris Club debt deal. The UK Government believes it is important to support the ownership, sovereign right and accountability of the elected Nigerian Government.

Related links:

back to top