Tuesday, 27 August, 2002, 19:49 GMT 20:49 UK
Nigeria suspends debt payments
Nigeria has said it can no longer afford to service its $33bn foreign
debts because its oil revenues have plunged and because some of its
privatisation plans have failed.
Consequently, the country has suspended payments on its debts, said the
governor of the central bank, Joseph Sanusi.

Last month, Nigeria held foreign exchange reserves of only slightly more
than $8bn, down about a fifth since December.

Mr Sanusi said he had decided to halt all debt repayments rather than to
eat further into the reserves.

"The external sector of the economy was under pressure during the period
under review," said Mr Sanusi

"The deficit was financed through the draw down of external reserves."

Making matters worse are Nigeria's inability to recover money which a
previous regime had stolen, officials said.

Mr Sanusi did not make any distinction between the Paris Club of
sovereign lenders and private lenders.

Spending cuts

The debt suspension was announced just as President Olusegun Obasanjo
was faced with possible impeachment by both houses of Nigeria's
parliament.

Mr Obasanjo stands accused of failing to curb the country's spending, of
ignoring budgets, of allowing corruption to remain and of ignoring
spending laws.

Nigeria's ruling party MPs have not yet decided whether to go ahead with
a debate to impeach the president, even though a two-week deadline given
by Nigeria's lower house of parliament for President Olusegun Obasanjo
to resign expired on Monday.

At the weekend, President Obasanjo signalled that the political crisis
was over and he went on national television to thank Nigerians for their
maturity in helping the country surmount recent problems.

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