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The UK’s official export credit agency, the Export Credits Guarantee Department (ECGD), has agreed to write off £2.8bn of Nigeria’s debt following a meeting of the Paris Club. The balance of £1.7bn will be paid to ECGD by Nigeria over the next six months.
Nigeria owed ECGD £4.5bn of debt originating from claims ECGD had paid out on business it had insured or guaranteed in the country before1989.
The overall deal from the Paris Club – an informal group of sovereign creditors including the UK – will result in the cancellation of some US$18bn of Nigeria’s US$30bn plus debt. In return, Nigeria will make cash payments of US$12.4bn. The deal, which will eliminate all of Nigeria’s debt to the Paris Club, is the largest debt relief package in sub-Saharan Africa.
This comprehensive debt treatment, announced on October 20, will help the Nigerian government reinforce its work in implementing reform and reducing poverty. It will spend an extra USS$1bn next year on poverty reduction programmes enabling Nigeria to:

  •  Recruit 120,000 teachers and put an extra 3.5mn children in school by 2008.
  •  Train doctors and distribute anti-HIV drugs.
  •  Increase investment in infrastructure.