Cablegate: Nigeria: Bilateral Debt Negotiations Remain
This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS ABUJA 001526
SENSITIVE BUT UNCLASSIFIED
E FOR WMCGLYNN
EB/IFD/OMA FOR PREID
STATE PLEASE PASS TO EX/IM FOR DSOMERVILLE, DSCHNEIDER
E.O. 12958: N/A
TAGS: ECON EFIN NI PREL
SUBJECT: NIGERIA: BILATERAL DEBT NEGOTIATIONS REMAIN
REF: A. A) ABUJA 1375
B. B) ABUJA 1374
C. C) STATE 79460
D. D) CARRIG-MULLINAX 12JUN01 EMAIL
E. E) STATE 97771
1. (SBU) Director General of the Debt Management Office Mr.
A.S. Arikawe told Economic Section Chief June 27 that he
remains pessimistic on prospects for an early resolution of
USG/GON differences regarding the bilateral debt rescheduling
agreement required to implement the December 2000 Paris Club
2. (SBU) Arikawe reports that Nigeria continues its
negotiations with several bilateral creditors, but that the
GON's differences with the U.S. are the most substantive and
those differences are growing. In addition to the objections
mentioned in Refs A and C, Arikawe cited the following as
"among the major problems":
(a) The GON disagrees with the interest accrual method,
asserting that 5 percent per annum compounded daily results
in greater interest charges than 5 percent per annum
compounded annually, thus the effective interest rate is not
as agreed to originally.
(b) The GON would require a rate of 5 percent compounded
annually, or, as an alternative, USG agreement to use a
360-day basis year with monthly compounding.
(c) A clarification of and adjustment in the interest rate
and charges for non-previously scheduled debt.
3. (SBU) According to Arikawe, the GON will convene a
gathering of Nigerian debt experts the week of July 9 to
give the Debt Management Office's proposals "a thorough
scrub" before they are submitted for approval for
presentation to the USG. He now estimates the week of July
16 as the earliest that we can expect to receive those
written comments promised at the May 3 Washington meetings.
4. (SBU) Arikawe further reported that Nigeria's Finance
Minister wrote June 27 to the Paris Club Chairman requesting
a five-month extension from June 30 to November 30 (vice the
3-month extension noted in para 6, Ref A) for concluding the
bilaterals required to implement the December 2000 Paris Club