Paris Club agrees to enter talks with Nigeria for debt relief

By Reshmi Basu

New York, June 30 - Paris Club creditor countries said they have agreed to begin negotiations with Nigeria on debt relief.

The decision came after Nigeria had been declared eligible for IDA-borrowing status, the Paris Club said in a statement.

IDA resources are allocated on the basis of borrowers' policy performance and institutional capacity, according to the World Bank's web site.

The Paris Club said the decision also follows Nigeria's willingness to pay all its arrears toward Paris Club creditors and to treat them equitably.

"The significant debt relief would ensure long-term debt sustainability and would represent an important contribution by Nigeria's Paris Club creditors to its economic development."

The members also took note of the economic reform program implemented by Nigeria since 2003 and the country's willingness to take advantage of the revenue windfall.

At the end of 2004, the Nigeria's external debt was $36 billion, of which $31 billion was owed to Paris Club creditors, according to Nigeria's Federal Ministry of Finance web site.

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