Nigeria to exit London Club in March— Nenadi
The federal government has embarked on the final phase of redeeming its debt to London Club by the end of March 2007.
Nigeria’s remaining debt to the club is made up of 512 million dollars promisory notes due by 2010 and issued by the Central Bank of Nigeria (CBN) in 1984 and 1.76 million oil warrants issued by the CBN in 1991.
Finance Minister Nenadi Usman, who announced this yesterday in Abuja, said that Nigeria would issue notice to holders of promisory notes and oil warrants by way of press releases in national and international media.
The aim of the release, she said was “to communicate the exit strategy and implementation arrangements’’
The minister said that Nigeria intended to seek noteholders approval for a payment arrangement that would effectively substitute a first class international bank in place of the CBN as the sole obligor for all remaining installments due under the promisory notes.
“Under this arrangement, Nigeria will be fully discharged and released of the remaining payment obligations under the promisory notes,’’ she said.
She said that the oil warrants would be purchased via a tender offer structured in the form of a Dutch auction which had been used by he CBN in the past for the sale of foreign exchange The minister said that both strategies were arrived at after careful and exhaustive review of the various options available to Nigeria for exiting from the London Club.
“In undertaking this reivew, we consulted widely with leading financial institutions and law firms across the globe.
“We have involed stakeholders, including representatives of the National Assembly and state governments,’’ she added.
The minster listed some of the benefits Nigeria would derive from exiting London club debt to include financial savings from interest payments, cleaning up of the country’s balance sheet, improving the country’s economic profile and removing the legacy of these debts.