Cablegate: World Bank Strategy for Debt Relief in Nigeria May

This record is a partial extract of the original cable. The full text of the original cable is not available.

071702Z Jul 05

UNCLAS LAGOS 001064

SIPDIS

E.O. 12958: N/A
TAGS: EFIN ECON PGOV PREL NI
SUBJECT: WORLD BANK STRATEGY FOR DEBT RELIEF IN NIGERIA MAY
FALL SHORT OF REAL NEEDS

1. (U) On July 5, 2005, the Lagos Business School held its
usual monthly breakfast for Nigerian business leaders.
Different from the usual, however, this month's meeting
focused on Nigeria's recent triumph in securing debt relief
from Paris Club donors. Hafez Ghanem, the World Bank (WB)
Country Director for Nigeria, spoke on debt relief and its
impact on planned development programs in the country.

2. (U) Ghanem confirmed that, in response to debt relief and
the vote of confidence in Nigeria's economic reform
programs, the WB would be nearly doubling its Nigeria
portfolio from its present level of about $1.2 billion over
the next two years. The WB's total portfolio in Africa is
valued at approximately $5 billion. Ghanem then reiterated
the WB's traditional commitment to poverty reduction and
assistance in the areas of governance, infrastructure, and
trade, but cited corruption and gender inequalities as
problems that would receive particular attention in Nigeria.

3. (U) Ghanem also said that he was hopeful that Nigeria
would avoid common pitfalls of debt relief, namely that the
country uses its increased creditworthiness to incur more
debt, and swiftly returns to highly indebted status.
Unfortunately, these remarks were met with a series of
chuckles and acknowledgement on the part of many of the
banking leaders present. Ghanem had trouble responding to
one business leader's observation that neither debt relief
nor WB programs affect the rising unemployment rate, one of
the most inveterate and incapacitating problems facing
Nigeria today.

4. (U) Ghanem closed with an appeal for the audience to view
debt relief and increasing development funds as a new and
different start, but business leaders present appeared to
adopt a wait-and-see posture.

5. (U) This cable has been cleared by U.S. Embassy Abuja.

HOWE

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