Nigeria seeks big debt write-off

By Martin Plaut
BBC News reporter

Nigeria is seeking to have its massive international debts sharply reduced.

Nigeria objects to paying back money its people never received

The country owes the rest of the world $35bn, and is currently in negotiations with its creditors.

Part of Nigeria's case is that most of the money was lent to corrupt military dictators, as the foreign banks and governments well knew.

The present government therefore argues it should not have to pay them back.

The Paris Club of creditor nations will be meeting on Wednesday to look at Nigeria's debts for the second time this month.

Nigeria is offering to pay back just thirty cents in every dollar, and there are no doubt tough negotiations ahead.

The meeting comes as London-based oil analysts say rising oil prices have meant a sharp increase in Nigeria's income.

One key question is how the debts were run up.

'Victims twice'

Mr Ribadu, head of Nigeria's Economic and Financial Crimes Commission, told the BBC that the country had received around $400bn in Western aid and loans since independence in 1960.

And most of it was squandered.

WHAT NIGERIA OWES UK - $7bn France - $5.6bn Germany - $4.6bn Japan - $4.2bn Others - $11.7bn Total debt - $32.9bn Source: Nigerian Debt Management Office, 2003

Mr Ribadu estimated that around $50bn had been illegally taken abroad by corrupt military dictators.

"It is not right that Nigeria should be asked to pay for the corruption of the past. We were victims and should not be made victims again," he said.

The Nigerian authorities are working hard to get that stolen money back, and have so far recovered around $1bn.

Oil income rise

But Mr Ribadu's Commission is not just interested in foreign cash salted away abroad.

It is also trying to end Nigerian-based fraud. This often takes the form of emails offering huge rewards to foreigners, in return for a few thousand dollars to have the money released.

Mr Ribadu says he is having some success in this area, and has returned around $700m to foreigners, with one woman in Hong Kong receiving back $5m in the past two weeks.

But Nigeria has a terrible reputation as one of the most corrupt countries on earth. Ending this will be an uphill struggle.

Nigeria's debt negotiations come as London-based oil analysts say they estimate that the rising price of oil to around $60 a barrel has meant sharply increased income for Nigeria.

Analysts from Energy Intelligence say Nigeria received an additional $2.7bn for its sales of crude oil in the first six months of this year.

They say this initial calculation only reflects sales from oil owned by the Nigerian National Petroleum Corporation. It does not include royalties and taxes from multinational oil companies.