Nigeria said Friday it made a final wire transfer to pay off its Paris Club debt, becoming the first country in Africa to clear its books of loans by that group of Western creditors.
While the move will free up cash for investing at home, Africa’s most-populous nation still isn’t completely debt-free, owing US$5 billion to other creditors.
Nigeria worked off US$30 billion in Paris Club debts through cancellation grants and buy-backs and it sent the last tranche of US$4.5 billion in several currencies on Friday, said Mansur Muhtar, head of Nigeria’s Debt Management Office.
"All the creditors need is to confirm receipt and automatically that will trigger the terms of the deal," said Muhtar.
Most of oil-rich Nigeria’s debt came from loans taken in the early 1980s, as oil prices fell. In 1985, the total debt stood at US$19 billion (euro15.4 billion).
At the end of 2004, it had ballooned to US$35 billion (euro28.4 billion) with arrears and penalties piled up under a succession of corrupt military governments.
The Paris Club deal required Nigeria to pay about US$12.4 billion (euro10 billion) in exchange for the cancellation of US$18 billion (euro14.6 billion) in debt.