Sources: Nigeria to end bulk of $500m debt - BBC.com, Nigeria to repay most its debt in Merrill deal - FT - Reuters.com.
Nigeria currently owes $500 million to the London Club, a group of creditor nations. However, the country has recently entered into a deal with the United States based investment bank Merrill Lynch, in which the bank will take on the debt.
Nigeria's finance minister, Nenadi Usman, said that the reasoning behind the deal was to give Nigeria a "fresh start." Additionally, the government hopes that the deal will encourage credit rating agencies to improve Nigeria's investment rating, therefore making Nigeria more attractive to investors.
After receiving $18 billion in debt relief from another group of creditors (the Paris Club), and using $12 billion in oil revenues to pay off other debts, the only debts that Nigeria will owe are those owed to multilateral institutions in addition to some bilateral loans.
Questions:
1. In what ways will this deal give Nigeria a "fresh start"?
2. Nigeria's current president has prioritized the reduction of debt for the country. How will the country's development be affected if the next Nigerian president does not have the same priorities?
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