What is the background to the completion of Nigeria’s debt deal this weekend?
Nigeria had been trying to get debt relief since Obasanjo was elected in 1999. These efforts failed until last year when three things finally came together. First, the government started cracking down on corruption. Second, the country was reclassified by the World Bank as “IDA only,” a technicality that kept them out of consideration for either HIPC or a favorable Paris Club deal. Lastly, the treasury was able to save oil revenues (reserves have risen from almost nothing in 1999 to about $34 billion today) which gave Nigeria the cash to put on the table to get the deal done. Q: Will Nigeria still be a borrower and/or aid recipient? A: Nigeria has lots of cash, but there are two relevant caveats to this. First, the country has perhaps 140 million people, so the social service needs of the country are substantial. Perhaps more importantly, the systems for spending money are still far from being fixed, which means using money wisely is not that easy. Because of this, Nigeria will still p
