Posted by From Kunle Aderinokun in Abuja on
Finance Minister Ngozi Okonjo-Iweala said yesterday that Nigeria has saved a "potential $8 billion" following the $18 billion debt relief secured from the Paris Club. The amount, she said, would have been paid in interest, if Nigeria had been asked to reschedule the debt rather than pay about $12 billion now without interest.
Finance Minister Ngozi Okonjo-Iweala said yesterday that Nigeria has saved a "potential $8 billion" following the $18 billion debt relief secured from the Paris Club. The amount, she said, would have been paid in interest, if Nigeria had been asked to reschedule the debt rather than pay about $12 billion now without interest. She said the $8 billion interest is in addition to $1 billion debts service payment, the country would have to contend with for the next 23 years.
Speaking with newsmen, yesterday in Abuja, Okonjo-Iweala chided critics who prefer that Nigeria reschedule the remaining debt instead of paying it off, describing their position as "illogical and wrong."
According to her, "if we reject it, and we say thank you, take your debt relief we don't want it, we will end up paying $1 billion a year for the next 23 years.
"There is the other aspect. Some people are saying they have given us debt relief, the remaining balance of $12 billion, let's leave it, let's not pay it, let's reschedule and continue to pay.
"What it means is that we reschedule it over 23 years at 5.25 per cent, which is the interest rate, we will pay $20 billion. By the time we pay, the $12 billion will become $20 billion. So you would have ended up paying an additional $8 billion when you should have paid $12 billion. What you are doing is paying an additional $8 billion and that is just in interest. But the people are giving the option of paying when you don't have any interest. If you pay it now, there will be no interest, if we reschedule it again, we will end up paying interest and paying $8 billion."
Okonjo-Iweala said that that it was illogical and wrong to say that some corrupt Nigerians and past leaders accumulated the debt.
"You cannot say because past leaders made mistakes or we are corrupt or because some people are still misbehaving and the rest of the country should pay for everybody's sin and mistake. It is illogical. Don't say that because Nigeria is not a perfect country, that because of that, don't forgive us, we will continue to pay and bear the burden for the next 30 years. The people who are talking, did they realize what they are saying : that me, you and our children and may be our children's children will continue to pay this debt? Is it not tax payers' money, is it not oil resources that will be used to pay this? How can somebody be so illogical? she asked.
Noting that allowing the country to pay the debt upfront was a big privilege, the finance minister asked if Nigerians would prefer to throw away $8 billion.
"Do Nigerians want the remainder after debt reduction to be rescheduled for us to throw away $8 billion?, Do they want the thing to be paid up now?, Do you also want to be free? Or do you want these countries to be coming around every minute, bothering you about one thing or the other?" she asked.