NIGERIA is to exit the London Club of Creditors next month if the offer of $220 per oil warrant is accepted by the holders, in a fresh push to complete the last leg of deals to free Nigeria of all major foreign debts before the end of the President Olusegun Obasanjo administration.
Only two weeks ago, the Federal Government successfully negotiated a legal freedom from the $512 million promissory notes debt. There are 1.786 million outstanding units of oil warrants.
Officials of the Debt Management Office (DMO) said, yesterday, in Abuja that holders of the warrants had been invited to tender their warrants for cash at a minimum clearing price of $220 per warrant. They have up till March 29, 2007 to respond.
The Central Bank (CBN) is directly involved in the deal. Barring any major price modification by the CBN, clearing the oil warrants could cost Nigeria in the region of $400 million (or about N50 billion).
Officials said government through the CBN had taken steps to buy back the oil warrants from the holders as part of the efforts to pay off the London Club debt.
Under the oil warrant agreement, the amount paid yearly increases as oil prices go up. With the current international crude oil price level, the nation could be paying $52 million per year to creditors and this could continue to 2020 when the warrants mature, if the deal doesn�t sail through.
Minister of Finance, Mrs. Nenadi Usman, had said the present administration wanted to bequeath a virtually debt-free nation to its successors, at least, with regard to foreign debts. The only exception would be the International Development Agency (IDA) interest-free credit facilities of the World Bank.