Nigeria auction cuts debt payments
Published March 30th, 2007
Nigeria has reached the end of a huge debt elimination programme under the administration of its president, Olusegun Obasanjo, though an auction has not settled all the country’s remaining legacy debt.
Of roughly 1.76m oil warrants auctioned, about 21 per cent, were bought back at the government’s indicated minimum price of $220, at a total cost of about $81m.
Buying back these warrants will save the country about $11m a year in interest payments. Nigeria will still pay just under $42m annually at current oil prices, but this is a drop in the ocean compared with its oil-related earnings.
Mansur Muhtar, Nigeria’s leading debt management official, said he was happy with the outcome and transparency of the auction. The next government would decide what to do about the remaining warrants after the elections in April, he said.
“I believe they would want to keep all options open,” Mr Muhtar said.
Nigeria has cut its debt from more than $30bn to almost nothing in recent years through debt forgiveness programmes and the use of its oil wealth.
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