Premium
What Did US$18 bn Achieve? The 2005 Debt Relief to Nigeria
Author(s) -
Dijkstra Geske
Publication year - 2013
Publication title -
development policy review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.671
H-Index - 61
eISSN - 1467-7679
pISSN - 0950-6764
DOI - 10.1111/dpr.12025
Subject(s) - conditionality , debt , external debt , creditor , internal debt , club , economics , debt service coverage ratio , debt levels and flows , debt to gdp ratio , debt overhang , monetary economics , financial system , international economics , business , finance , political science , politics , medicine , law , anatomy
Since 2003 Nigeria's economic growth has been consistently above 6% and has been driven by non‐oil sectors. This article attempts to assess the contribution of the 2005 debt‐relief agreement to this higher growth. The agreement eliminated Nigeria's US$30 billion debt to Paris Club creditors who cancelled US$18 bn, while Nigeria paid back US$12 bn. The article traces the three possible impact channels of debt relief, namely, the flow (reduced debt service), the stock (removal of debt overhang) and the conditionality channel, and comes to the conclusion that the debt‐relief agreement played a key role in the country's improved economic performance, in particular through successful conditionality.