Maku Allays Fears Over Nigeria’s $5bn External Debt

The Minister of Information, Mr Labaran Maku, has dispelled
fears that Nigeria’s foreign debt profile of 5 billion U.S. dollars could harm
the economy.

“We currently owe 5 billion dollars as foreign debt,’’ the
minister said, while speaking with Nigerian journalists in London.

“ If you compare that to our foreign reserves and our
economic capacity, there is no problem as far as the country’s external debt is
concerned,’’ he added.

Maku, who noted that most developed and developing nations
were not free from debt, however, conceded that debts should not be allowed to
overwhelm the country’s capacity to pay back.

He stressed that in the last 13 years of Nigeria’s
democracy, the country had been able to exit the debt track.

Maku recalled that at a point in time, the country owed the
Paris Club of creditors about 35 billion U.S. dollars, adding that the country
was, nonetheless, able to pay off a substantial part of its external debt.

“What led to the huge debt was that the money borrowed was
used for things that were not productive,” he said.

The minister stressed that the “new’’ debts owed by the
government were used to revamp the country’s infrastructure such as the
railways and the power plants.

“These debts are private-sector loans, guaranteed by
government, because the loans are given out at lower interest rates,’’ he said.

Maku said that for instance, the Chinese Nexim Bank was
currently negotiating a loan to build modern rail tracks in Nigeria.