Debt relief and Development: The case of the 2005 debt relief agreement with Nigeria

In 1999 Nigeria became a democracy again after a long period of dictatorship. One of the top priorities for the newly elected President Obasanjo was to clear the huge foreign debt that the country had built up in previous decades. Most of this debt was with bilateral official creditors, united in the so-called Paris Club.1 But debt relief to Nigeria was controversial. Although the country has a low income, it has large oil reserves with which it should be able to pay its debt. Furthermore, the country is notorious for its corruption and for irresponsible economic policies.