Jubilee Plus Press Release

Drops of Oil in a Sea of Poverty – the case for a new debt deal for Nigeria

Date: 13 November 2001
Contact: Kwesi Owusu tel: 0207 089 2838
[email protected]

The demands of past debt on the democratic government of Nigeria is handicapping its capacity to resolve growing internal social and ethnic tensions, says Jubilee Plus, in a new report.

In a report to be issued on 16th November 2001 – "Drops of Oil in a Sea of Poverty – The case for a new debt deal for Nigeria" – Jubilee Plus notes that debt service payments of US$1.4 billion per annum is crippling Nigeria’s capacity to confront critical socio - economic and political challenges. Nigeria ranks 151st out of 174 countries in the HDI poverty index but its creditors are still demanding 15 times in debt service what it is able to spend on poverty reduction. For Nigeria to meet poverty reduction targets set by the United Nations for the year 2015, it needs to spend about US$11 billion per year on social services – well above present levels and nearly double what we consider to be reasonable given the taxing capacity of its poor population.

The report notes that whilst Nigeria’s oil revenues have provided welcome relief to the country’s hard-pressed finances, they cannot be said to enrich Africa’s most populous nation. "Revenues net of production costs and foreign company earnings are approximately US$11 billion, which for a population in excess of 111 million equates to net revenues of only US$100 per person, per annum or 27 cents a day" says Kwesi Owusu, head of Jubilee Plus’ Africa programme and author of the report.

Nigeria’s democratic government is carrying US$14 million of debt racked up by previous dictatorships and large amounts of Nigerian reserves are deposited in foreign banks as a result of capital flight. General Abacha alone stole and deposited US$4 billion in Western banks – in London, Washington, Frankfurt and Zurich. Oil companies such as Shell, Mobile, Texaco and Chevron also owe huge ecological debts to Nigeria as a result of the degradation of the Niger Delta, the main oil producing area, according to the report.

Jubilee Plus is proposing a new concordat between Nigeria and its creditors, based on an independent and transparent process overseen by civil society. "The essential elements of the deal must include a public agreement on what proportion of the outstanding debt must be immediately cancelled, what resources Nigeria should realistically devote to servicing the debt, what losses creditors should bear, including an equitable distribution of the costs amongst all creditors and arrangements to protect the environment" says Kwesi Owusu.

Notes for editors;

- The report "Drops of Oil in a Sea of Poverty – The case for a new debt deal for Nigeria" is available from www.Jubileeplus.og

- Nigeria is Africa biggest debtor and owes US$28.5 billion to its external creditors, according to the Debt Management Office (DMO), set up by the Nigerian government. The IMF puts the stock of debt at US$31.9 billion.

- Nigeria’s GDP per capita is US$853 per capita compared to US$22,093 for the UK, US$26,251 for Canada , and US$24,575 for Australia. Maternal mortality is amongst the highest in the world, with 700 women dying out of every 100,000. 10% of infants die at birth.

- Nigeria’s largest oil spill was an offshore well blowout in January 1980 when an estimated 200,000 barrels of oil (8.4 million) spewed into the Atlantic Ocean from a Texaco facility and destroyed 340 hectares of mangrove. Nigeria flares more gas than any other country in the world – about 75% of its total gas production, contributing a high percentage of the world’s total emissions of greenhouse gases.

End

Kwesi Owusu
Head, Jubilee Plus Africa Programme
Jubilee Plus at the New Economics Foundation
Cinnamon House
6-8 Cole Street
London SE1 4YH
Tel +44 (o) 20 70892838
m:07714 895932
Fax: +44 (o) 207407 6473
Email [email protected]
Website: www.jubileplus.org